When a company makes an important decision requiring shareholder approval, it sometimes goes through the regular channel and sometimes doesn't. For example, when a resolution has the majority support of the shareholders, the use of a Shareholders' Consent in Lieu of Meeting suffices. It is a way to save time and expedite the process of approving corporate resolutions.
A Shareholders' Consent in Lieu of Meeting is particularly useful for small or significant company decisions. Formal shareholders' meetings may be called to decide what to do with mergers, settling lawsuits, replacing directors, buying properties, and a whole lot more.
When all or most shareholders agree, the chairperson or the corporation's secretary create a Shareholders' Consent in Lieu of Meeting and get it signed by the concurring shareholders. This is the fastest way to take action and is frequently used when the management agrees with how to run the company.
Depending on your state, a Shareholders' Consent in Lieu of Meeting may also be known as:
Consent of Shareholders
Written Consent of Shareholders
Shareholders' Consent to Action Without Meeting Form
Shareholders' Consent Letter
A corporation will run into a need to use the Shareholders' Consent in Lieu of Meeting from time to time. Any number of shareholders may be out of the country, incapacitated, or otherwise unavailable to attend a meeting. If a sufficient number of shareholders agree with the decision as concurrent with the company's bylaws, the use of such a shareholders' consent is in order.
Create your own documents by answering our easy-to-understand questionnaires to get exactly what you need out of your Shareholders' Consent in Lieu of Meeting.
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Your company's Shareholders' Consent in Lieu of Meeting may be used quite regularly. Having a practical template customized to the requirements of your company will speed up the process.
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To create your document, please provide:
Corporation details: Full legal name of the company with the address
Effective date: The date when the consent becomes valid (usually right after signing)
Governing law: The state where the company was incorporated
Shareholders: The names and addresses of the shareholders signing the consent
Chairperson: Identifies the person who presides over the board of directors
The extent of consent: An explanation as to whether unanimous consent is necessary or not
Signatures: Signatures of all the shareholders giving their consent
Shareholder: A person or legal entity owning shares in a company
Board of directors: A group of people appointed by shareholders to act in their best interests
Agenda: List of actions or topics needing to be addressed during the meeting
Resolution: A formal decision made by the board of directors or shareholders
Motion: A formal proposal made during the meeting
Meeting Minutes: A written record of everything happening during a meeting, i.e., the official notes of the meeting
Chairperson: A person presiding over the meeting
A crucial feature of the Shareholders' Consent in Lieu of Meeting is unambiguity. After you've created the document, make sure to review it thoroughly. All the shareholders involved in giving the consent need to sign it, including the secretary or the chairperson. The document doesn't need to be notarized unless it's explicitly stated in the company's bylaws.
Upon signing, the Shareholders' Consent in Lieu of Meeting should be kept in the company's minute book. Also, the shareholders should keep a hard copy or a digital copy of the consent.
It is unnecessary to hire a lawyer to produce your Shareholders' Consent in Lieu of Meeting form. However, it could be beneficial to consult an appropriate law firm if you don’t know how to proceed or simply desire to be extra careful about everything being aboveboard.
By definition, the Shareholders’ Consent in Lieu of Meeting is revocable. Unless perhaps in the event that it is specified to the opposite. However, a revocation is only possible before the resolution is approved and filed as an official corporate decision.
There are no meaningful differences between a Shareholders' Consent and meeting minutes in terms of functionality. To clarify further, meeting minutes are used when a meeting actually takes place. Whereas a Shareholder's Consent in Lieu of Meeting specifically vacates the necessity of holding a meeting. Both documents are both filed in the company's minute book together with all other records of meetings and resolutions.
Officially, a shareholder resolution is a proposal that all shareholders submit for a vote at the annual shareholders' meeting. It is a type of non-binding recommendation to the board of directors. Shareholder resolutions are serious matters usually put to a vote immediately.
One of the most important aspects of the Shareholders’ Consent in Lieu of Meeting is to specify if unanimous consent is necessary or otherwise. When the pursued action isn't unanimous or if a shareholder hasn't made up his or her mind, scheduling a meeting is probably a better option. Certain corporate resolutions are traditionally best discussed by shareholders in person.
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