What Is a Circular Resolution for the Appointment or Removal of Board Members?

A circular resolution is a simple way to appoint or remove board members without the need for an in-person meeting. Instead, the resolution is shared with all shareholders, and they can sign it remotely. This method streamlines the decision-making process and keeps everything legally clear. Once everyone has signed the resolution, the decision is final. You might use a circular resolution when a board member leaves or needs to be removed for performance reasons, and you need to fill the position quickly.

To make a circular resolution, you just need to draft the resolution with the details of the decision, send it to shareholders for review, and then collect their electronic signatures—whether electronically or on paper. Just ensure that the resolution complies with your company’s rules and local regulations.

Need a similar template for the appointment or removal of managing directors of a Ltd?

Circular Resolution - Appointment or Dismissal of Managing Directors

A circular resolution for appointing or removing managing directors lets you make leadership changes without needing to meet in person. However, when appointing a managing director via circular resolution, each shareholder’s signature must be notarized, unlike removal resolutions.
By using our circular resolution template for the appointment or removal of managing directors, you can easily handle these changes in a compliant and smooth way.

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Legal Framework for Appointment/Removal of Board Members

In accordance with § 84 of the Austrian Stock Corporation Act (AktG), board members are required to act with the care of a prudent and conscientious manager, always prioritizing the company’s best interests. They must avoid conflicts of interest, maintain confidentiality, and base decisions on appropriate information. If board members breach their duties, they are jointly liable for any resulting damages, though they can defend themselves by proving they acted with due diligence. In cases of improper actions, the company or its creditors can seek compensation from the board members.

The appointment or removal of board members must comply with the company’s articles of incorporation and shareholder decisions. Using a circular resolution for these decisions ensures that all shareholders can participate remotely, facilitating a quicker and more efficient process. This method allows the company to make timely leadership changes while staying within legal boundaries and maintaining compliance with corporate governance standards.

Circular Resolution Template for Appointment or Removal of Board Members

Need to create a resolution quickly? Our circular resolution template for appointing or removing board members is designed to make the process easy. The template includes all the essential elements, including names, legal details, and voting options, so you can ensure compliance while staying organized.

Why Use Our Template?

• Efficiency: You can make changes fast without the hassle of a physical meeting.
• Security: Your votes and electronic signatures are encrypted, protecting them from unauthorized changes.
• Real-Time Updates: You get notifications whenever someone votes or signs, so you’re always up to date.
• Collaboration: Share the resolution with stakeholders easily and let them review and sign from anywhere, making the process more flexible.
• Time-Saving: No need for endless emails or in-person meetings.
• Compliance: Our templates are structured to comply with relevant legal requirements, ensuring everything stays on track.

Using fynk also let you to access various feature and tools to create and handle your contracts completely digital!

Can circular resolutions be used for other decisions besides appointing or removing board members?

Yes, circular resolutions can be used for other shareholder decisions as long as your company’s rules allow it. You might also use them for decisions like company dissolution, approval of financial statements, entering into contracts, or denying inspection rights.

What if a shareholder doesn’t sign the resolution?

If a shareholder doesn’t sign, the resolution won’t be valid unless your articles of incorporation state otherwise or the quorum requirements are met.

Are electronic signatures acceptable for circular resolutions?

Yes, electronic signatures are fine, as long as they meet legal requirements. You can safely use qualified electronic signatures, which have the same legal standing as handwritten signatures.

Do I need to explain the reason for appointing or removing a board member in the resolution?

While it’s not always required, it’s recommended to include reasons for the decision. This adds clarity and transparency to the process, helping avoid any confusion or questions later on.