This memorandum has been prepared for the assistance of our clients in connection with the provisions relevant to Members' Resolutions under the Companies (Guernsey) Law, 2008 (as amended) (the "Companies Law"). It is intended to provide only a summary of the main legal and general principles and it is not intended to be comprehensive in scope. It is strongly recommended that you seek specific legal advice on such matters and we would be pleased to assist in this respect. A series of briefings on other specific aspects of Guernsey companies has been produced by Ogier and is available on our website www.ogier.com. Transitional provisions have also been made (a separate briefing addresses the operation of these).
This memorandum has been prepared on the basis of the law and practice in Guernsey as at 10 September 2008.
Introduction
There are four different types of members' resolutions under the Companies Law. They are as follows:
- Ordinary resolutions,
- Special resolutions,
- Waiver resolutions, and
- Unanimous resolutions.
Ordinary Resolutions
An ordinary resolution of the members of a company means a resolution passed by a simple majority (subject to the company's memorandum and articles). If the resolution is a written resolution, it is passed by a simple majority if it is passed by members representing a simple majority of the total voting rights of eligible members.
If an ordinary resolution is to be passed at a meeting by a show of hands, it must be passed by a simple majority of the members, or duly appointed proxies of members, who vote in person on the resolution. If a resolution is to be passed on a poll taken at a meeting, it must be passed by members representing a simple majority of the total voting rights of members who vote in person or by proxy on the resolution. If the resolution is to be proposed at a meeting, the articles of incorporation may specify the manner in which notice must be given. Anything that may be done by ordinary resolution may also be done by special resolution.
The actions which require ordinary resolutions are as follows:
| Action | Description of Requirement | Section |
| Appoint directors | The appointment of directors (unless the company's memorandum or articles provide otherwise). | s.139(2) |
| Ratify acts of directors | The ratification of acts of directors (subject to anything in the company's memorandum or articles requiring a higher majority or unanimity). | s.160(2)(b) |
| Prepare accounts | The requirement, by the members of a holding company, for the preparation of individual accounts in respect of that holding company, even where consolidated accounts have already been prepared in respect of that holding company and its subsidiaries. | s.244(6) |
| Appoint auditor | The appointment of an auditor by the members of the company, in certain situations. | s.257(4) |
| Auditor's remuneration | The remuneration of an auditor who has been appointed by the members of the company (or by the directors, if the members so resolve by ordinary resolution). | s.259(a) |
| Remove auditor | The members of a company removing an auditor from office. | s.268(2)(a) |
| Alter share capital | The alteration of a company's share capital (a copy of any such resolution must be filed with the Registry within 30 days of it being passed). | s.287(1) and (4) |
| Issue shares | The directors exercising the power of a company to issue shares. | s.292 |
| Acquire own shares | A market acquisition of a company's own shares. | s.315 |
| Acquire treasury shares | A company holding its own shares that it has acquired as "treasury shares" (subject to any to any provision to the contrary in the company's memorandum or articles). | s.326(1)(b) |
| Voluntary winding up | The voluntary winding up of a company, in certain circumstances (a copy of any such resolution must be filed with the Registry within 30 days of it being passed). | s.391(1) and (2) |
| Appoint liquidator | The appointment of a liquidator, and the fixing of his or her remuneration. | s.395 |
| File vacancy in office of liquidator | The filling of any vacancy in the office of a liquidator (subject to the provisions of any arrangements made with a company's creditors), and | s.396 |
| Alter memorandum of incorporation to increase share capital | The alteration of an existing company's memorandum of incorporation in order to increase the company's share capital (a copy of any such resolution must be filed with the Registry within 30 days of it being passed). | s.18 of the Companies (Transitional Provisions) Regulations 2008 (the "Transitional |
Special Resolutions
A special resolution of the members of a company means a resolution passed by a majority of not less than 75%. If the resolution is a written resolution, it is passed by a majority of not less than 75% if it is passed by members representing not less than 75% of the total voting rights of eligible members. A written resolution is not passed as a special resolution unless it was proposed as a special resolution; and once so proposed it may only be passed as a special resolution. If the resolution is a special resolution passed at a meeting by a show of hands, it is passed by a majority of not less than 75% if it is passed by not less than 75% of the members, or duly appointed proxies of members, who vote in person on the resolution. If the resolution is a special soresolution passed on a poll taken at a meeting, it is passed by a majority of not less than 75% if it is passed by members representing not less than 75% of the total voting rights of the members who vote in person or by proxy on the resolution. Where a resolution is passed at a meeting (i) the resolution is not a special resolution unless notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a special resolution, and (ii) if the notice of the meeting so specified, the resolution may only be passed as a special resolution. A copy of every special resolution must be filed with the Registry within 30 days of it being passed (s.178).
The actions which require special resolutions are as follows:
| Action | Description of requirement | Section |
| Authorise application to change name of Company | The authorisation of an application to change the name of a company. | s.25 |
| Alter/include statement of objects in memorandum of incorporation | The alteration or inclusion of a statement of objects in a company's memorandum of incorporation. | s.38(5) |
| Alter memorandum of incorporation of IC | The alteration of a memorandum of incorporation of an incorporated cell. | s.39 |
| Alter articles of incorporation | The alteration of a company's articles of incorporation. | s.42 |
| Alter articles of IC | The alteration of the articles of incorporation of an incorporated cell (unless its memorandum or articles provide to the contrary). | s.43 |
| Conversion | The conversion of a non-cellular company into a protected cell company. | s.46(3) |
| Conversion | The conversion of a non-cellular company into an incorporated cell company. | s.47(3) |
| Conversion | The conversion of a protected cell company into an incorporated cell company. | s.48(3) |
| Conversion | The conversion of an incorporated cell into a noncellular company. | s.49(2) |
| Conversion | The transfer of incorporated cells between incorporated cell companies. | s.50(4) |
| Conversion | The conversion of a non-cellular company into An incorporated cell and transfer to incorporated cell company. | s.51 |
| Conversion | The conversion of a protected cell company into A non-cellular company. | s.52 |
| Conversion | The subsumption of incorporated cells into an incorporated cell company and conversion into noncellular company. | s.53 |
| Conversion | The conversion of an unlimited or mixed Liability company into a limited liability company. | s.55 |
| Conversion | The conversion of a limited liability company into a mixed liability company. | s.56 |
| Conversion | The conversion of an unlimited liability company into a mixed liability company. | s.57 |
| Approve amalgamation of each amalgamating body | The approval of amalgamation by the members of each amalgamating body corporate. | s.64(6) |
| Transfer registration of companies to overseas | The transfer of registration of companies to overseas (pursuant to an outward migration). | s.88 |
| Revoke ICCs exemption to hold AGM | The revocation of an incorporated cell's exemption from the requirement to hold an annual general meeting. | s.200 |
| Elect that appointment and remuneration of auditors shall be exercised by directors of ICC | The election by an incorporated cell that the functions of the members of an incorporated cell, in respect of the appointment and remuneration of its auditors, shall lie with and be exercised by the directors of its incorporated cell company. | s.261(2)(b) |
| Cancel uncalled share capital | The cancellation, by a company, of uncalled share capital (except in the event of a company being wound up). | s.286 |
| Authorise off-market acquisition of own shares by contract | The authority for an off-market acquisition of a company's own shares by contract. | s.314 |
| Release right to acquire own shares | The release of a company's right to acquire its own shares. | s.317(2) |
| Vary class rights of shareholders | The variation of class rights of shareholders. | s.342(3)(b) |
| Vary class rights of members who are not shareholders | The variation of class rights of members who are not shareholders. | s.343(3)(b) |
| Voluntary winding up | The voluntary winding up of a company. | s.391(1)(b) |
| Delegate powers to appoint liquidator | The delegation of a company's powers to appoint a liquidator and/or to enter into any arrangement regarding the powers to be exercised by the liquidator to creditors or a committee of creditors. | s.401 |
| Compulsory winding up of company by Royal Court | The compulsory winding up of a company by the Royal Court. | s.406 |
| Incorporate IC into ICC | The incorporation of an incorporated cell into an incorporated cell company. | s.472 |
| Amend Memorandum of incorporation to comply with the Law | The amendment of an existing company's memorandum of incorporation in order to comply with the Companies Law. | |
| Make/alter provision in Memorandum of Incorporation for any matter mentioned in the Law | The making, or alteration, of provision in an existing company's memorandum of incorporation for any matter mentioned in the Companies Law. | s.2 of Transitional Provisions |
Waiver Resolutions
A waiver resolution of the members of a company means a resolution passed by a majority of not less than 90%. If the resolution is a written resolution, it is passed by a majority of not less than 90% if it is passed by members representing not less than 90% of the total voting rights of eligible members. A written resolution is not passed as a waiver resolution unless it is proposed as a waiver resolution; and once so proposed it may only be passed as a waiver resolution. If the resolution is a resolution passed at a meeting by a show of hands, it is passed by a majority of not less than 90% if it is passed by not less than 90% of the members, or duly appointed proxies of members, who vote in person on the resolution. If the resolution is a resolution passed on a poll taken at a meeting, it is passed by a majority of not less than 90% if it is passed by members representing not less than 90% of the total voting rights of the members who vote in person or by proxy on the resolution. Where a resolution is passed at a meeting (i) the resolution is not a waiver resolution unless notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a waiver resolution, and (ii) if the notice of the meeting so specified, the resolution may only be passed as a waiver resolution. A copy of every waiver resolution must be filed with the Registry within 30 days of it being passed (s.179).
A waiver resolution must be passed in the financial year before the financial year to which it relates, unless it is the company's first financial year.
The actions which require waiver resolutions are as follows:
| Action | Description of Requirement | Section |
| Waive requirement to hold AGM | The waiving of the requirement to hold an annual general meeting. | s.201(1) |
| Exempt company from audit of accounts for financial year end | The exemption of a company from the requirement to have its accounts for a financial year audited. | s.256(1) |
Unanimous Resolutions
A unanimous resolution of the members of a company means a resolution agreed to by every member of the company. If the resolution is a written resolution, it is not passed as a unanimous resolution unless it is proposed as a unanimous resolution; and once it is so proposed it may only be passed as a unanimous resolution. Where a resolution is passed at a meeting (i) the resolution is not a unanimous resolution unless notice of the meeting included the text of the resolution and specified the intention to propose the resolution as a unanimous resolution, and (ii) if the notice of the meeting so specified, the resolution may only be passed as a unanimous resolution. A copy of every unanimous resolution must be filed with the Registry within 30 days of it being passed (s.180).
The actions which require unanimous resolutions are as follows:
| Action | Description of Requirement | Section |
| Alter memorandum of incorporation | The alteration of a company's memorandum of incorporation. | s.38(7)(b)(ii) |
| Make provision for entrenchment of certain articles | The making of provision for entrenchment of certain articles in a company's articles of incorporation. And | s.44 |
| Convert LLC into unlimited liability company | The conversion of a limited liability company into an unlimited liability company. | s.54 |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
