Decisions That Stand Up: A Practical Record for Board and Shareholder Approvals

Most private companies do not fail because a decision was wrong. They fail because the file cannot show that the decision was made by the right people, at the right time, with the right authority. A lender, buyer or HMRC officer may never ask for the minute of a routine board decision. When they do, the absence of one is rarely treated as a harmless administrative gap.

The good news is that the record can be simple. UK private companies have useful flexibility to decide matters without a physical meeting. That flexibility depends on the company's articles, the type of decision and the signatures obtained. The practical task is to make the written record as disciplined as the meeting it replaces.

Why the written record matters more than the meeting

A decision to borrow, appoint a director, enter a contract, declare a dividend, transfer shares or approve a related-party arrangement may be entirely sound. The risk arises when the company later has to prove the sequence: who proposed it, who was entitled to vote, who declared an interest, who signed and when the decision took effect.

That evidence is often needed at the least convenient moment. A bank conducting annual facilities review, a buyer running due diligence or HMRC reviewing a transaction will ask for the paper trail. A well-kept record does not guarantee a favourable outcome, but a missing record makes every other answer harder to defend.

When shareholders can use a written resolution

Under the Companies Act 2006, a private company may pass an ordinary or special resolution by written resolution without holding a general meeting. The resolution must be circulated to every eligible member. Eligible members are those entitled to vote on the circulation date.

The resolution is passed when eligible members representing the required majority of total voting rights sign. For an ordinary resolution, that is more than 50 per cent. For a special resolution, it is at least 75 per cent. The date of passing is the date on which the last required signature is obtained.

There are limits. A written resolution cannot be used to remove a director before the end of their term under section 168, or to remove an auditor under section 510. The company's articles and any shareholders' agreement may add further restrictions or consent rights. Where a matter requires a meeting, a written resolution is not a shortcut around that requirement.

Corporate members should sign through an authorised representative, and joint holders need care over who is entitled to sign. It is also sensible to keep evidence of circulation, not just the final signed page.

When directors can decide in writing

Board decisions are not governed by the same statutory written resolution procedure. The company's articles govern how directors may take decisions. The model articles for private companies often permit a unanimous written decision of the directors. Bespoke articles may permit a majority written decision, or may require a meeting.

A purported written board decision that the articles do not allow is vulnerable. Before relying on one, check the articles and any shareholders' agreement. If a meeting is required, hold one and minute it properly.

Conflicts need particular attention. A director with an interest in a proposed arrangement should declare it in the usual way. The articles may require the conflicted director to be excluded from the quorum or from voting. The written record should show the declaration and how the conflict was handled. A resolution signed by all directors is not automatically valid if the articles required a different process.

Signature, circulation and the audit trail

The signed resolution is the core document, but it is not the whole record. Keep the circulation email or letter showing the date sent and the recipients. Keep the proposed resolution and any supporting papers in the same file. Avoid undated signature pages. If a member or director did not sign, record that fact rather than leaving a gap that later needs explaining.

Where a decision is taken at a meeting, the minute should identify the directors present, the quorum, any declarations of interest and the resolution passed. Where a decision is taken in writing, the record should identify the route used and the date the decision became effective.

What to retain and what to file

Minutes of directors' meetings must be kept for at least ten years. Minutes of general meetings and shareholder written resolutions must also be kept for at least ten years. These records should be held at the registered office or another permitted place and made available for inspection in accordance with the Companies Act 2006.

Statutory registers may also need updating. An allotment of shares, appointment or resignation of a director, transfer of shares, change of company name or amendment to the articles can require an entry in the registers and a filing at Companies House. Special resolutions generally must be filed within 15 days. Routine board minutes are not filed at Companies House, but they still need to exist and be retrievable.

A short template that does the work

A one-page decision record is usually enough. It should include:

• the company name and company number;
• whether the decision is a board decision or a shareholder decision;
• the type of resolution, such as ordinary or special;
• the circulation date and the date the decision was passed;
• the matter decided and a short factual background;
• the authority relied on, including the relevant article, statutory provision or shareholders' agreement clause;
• any declarations of interest and how the conflict was managed;
• the text of the resolution;
• the signatures and the date of the last signature;
• the register updates and any Companies House filing required.

Five-point audit before the paper trail is tested

1. Authority. Does the articles, shareholders' agreement and statute permit this route for this decision? For a shareholder written resolution, is the matter one that cannot be passed in writing?

2. Eligibility and circulation. Was every eligible member sent the resolution? For a board decision, were all directors entitled to receive the papers?

3. Signatures and dates. Are the signatures original or properly evidenced, and are they dated? Does the stated date of passing match the last required signature?

4. Conflicts and quorum. Were interests declared? Was the quorum correct, and were conflicted directors excluded where the articles require it?

5. Retention and filing. Is the record in the minute book? Have the statutory registers been updated? Has any special resolution been filed within the 15-day period?

Run that audit before a financing, a sale or an HMRC enquiry, not during it. A decision log kept with the monthly board pack, signed pages filed in the same week and an annual review of the minute book will usually prevent the gap. The objective is not paperwork for its own sake. It is a record that allows the company to explain itself clearly when someone with a legitimate interest asks how the decision was made.