Approving a Material Contract (Board or Shareholder Resolution)
A board resolution (or shareholder resolution, where required) to approve a material contract with a company in England and Wales.
Approval of Material Contract
While directors generally have the authority to approve contracts, shareholder approval is required for certain agreements and arrangements, such as:
A substantial property transaction with a director or a connected person
Director service contracts longer than two years
Reserved matters in the articles or shareholders’ agreement
Transactions affecting share capital or constitutional documents (e.g., issuing new shares, amending Articles, or disposing of substantial company assets)
Make sure to check the Articles, shareholders' agreement, and any other major contracts for any restrictions imposed on director authority. If shareholder approval is required, use this template as an ordinary resolution of the shareholders (inserted into GitLaw's shareholder resolution template) and use this structure for a board resolution to recommend and approve the transaction afterwards.
IT IS RESOLVED THAT:
Approval of Contract
The Company be and is hereby authorised to enter into the [description of contract] between the Company and [counterparty] (the "Contract"), in the form produced to the board.
Make sure to document the presentation of the form to the board.
Authority to Execute
Any director be authorised, for and on behalf of the Company, to:
negotiate, finalise and agree the terms of the Contract (including any non-material amendments); and
execute and deliver the Contract and any ancillary documents.
Declarations of Interest
Any interests of directors in the Contract were declared and, where required, authorised in accordance with the Company’s Articles and the Companies Act 2006.
General Authority
Any director be authorised to do all acts and things which they consider necessary or desirable to give effect to this resolution and the transactions contemplated by it.
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England & Wales note
This version is drafted for England & Wales. Scotland and Northern Ireland differ on some points — for example notice periods and tribunal procedure. Tell GitLaw where you hire and it adjusts the draft.
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