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Q&As
Is a written resolution required on the grant of enterprise management incentives share options?
Published on: 30 January 2019
It is assumed that this Q&A is referring to a written resolution of a company’s shareholders, rather than its directors.
When establishing an enterprise management incentives (EMI) scheme, shareholder resolutions may be required for many reasons, including to approve the scheme, to authorise the grant of rights to subscribe for, or to convert any security into, shares in the company (option rights) or the allotment of shares in the company and/or to disapply any pre-emption rights in relation to such grant or allotment. It will vary depending on the circumstances of the case.
A private company limited by shares can pass a shareholder resolution as a written resolution in accordance with the procedure prescribed in Chapter 2 of Part 13 of the Companies Act 2006 (CA 2006) or at a general meeting of its shareholders. Any other company must hold a general meeting of its shareholders in order to pass a shareholder resolution.
CA 2006 provisions that may apply on the grant of EMI options require
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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Written Resolution definition
What does Written Resolution mean?
The CA 2006 prescribes that a private company limited by shares can pass resolutions at a general meeting of its shareholders, or as written resolutions in accordance with the procedure prescribed (CA 2006, s 281). Public companies limited by shares cannot pass written resolutions at all, even if their articles of association purport to authorise them to do so. A written resolution is passed when the required majority of eligible members have signified their agreement to it. Any provisions in a company’s articles of association attempting to prevent a resolution being passed as a written resolution is void.
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