What is a circular resolution of the Board of Directors?
Introduction
The Board of Directors makes important decisions for a public limited company. However, a physical meeting is not always practicable, necessary or possible. This is where the Circular resolution The new system is an efficient way of passing Board of Directors resolutions in writing or electronically.
In this article, you will find out what the circular resolution of the board of directors is, in which situations it is suitable and which legal framework conditions apply in Switzerland. We also show you how Konsento automates the process for boards of directors.
Table of contents
- Definition: What is a circular resolution?
- Use cases for a circular resolution
- Legal basis in Switzerland
- Tips for legally compliant implementation
- Automated circular resolutions with consensus
- Conclusion
Definition: What is a circular resolution?
A Circular resolution (also known as a circular resolution) enables the Board of Directors to pass resolutions without a physical meeting. Instead, the members give their approval in writing or electronically. This can be done on paper, by email or via a digital platform.
According to Swiss Code of Obligations a circular resolution is only valid if no member of the Board of Directors requests an oral consultation. Since the revision of company law in 2023, electronic resolutions no longer require a signature unless the company limited by shares has made a different provision in its articles of association or in the organizational regulations of the Board of Directors.
Use cases for a circular resolution
A circular resolution is particularly suitable for:
- Urgent decisionsthat do not allow any delay.
- Standard or routine decisionssuch as the approval of annual financial statements.
- Formal resolutionssuch as the appointment of an authorized signatory, a Capital increase or post-liberalization resolution or other capital measures or the adoption of AGM agenda items for planning the Annual General Meeting.
- Confidential matterswhich are to be adopted without major discussion.
- Geographically distributed boards of directorsthat cannot simply come together physically.
Legal basis in Switzerland
According to Code of Obligations A Board of Directors may adopt resolutions by written or electronic means if no member requests an oral consultation.
Important legal points:
- Electronic resolutions are validas long as there is no regulation to the contrary.
- E-mail resolutions are permissibleprovided they are clearly marked as a resolution and the motions are formulated in sufficient detail.
- While in the case of the Adoption of resolutions by electronic means in accordance with the applicable Code of Obligations No signature of the members of the Board of Directors is necessary, this is Resolutions must be passed in writing on paper for reasons of verifiability.
Tips for legally compliant implementation
To ensure that a circular resolution is legally compliant, stock corporations should note the following points in their model circular resolution of the Board of Directors:
- Clear formulationThe application must be clearly recognizable as a resolution.
- Clear approvalThe answer should be short and without reservations.
- No conditionsIf there are any requests for changes, a new application should be submitted.
- Regulation in the organizational regulationsThe Board of Directors can determine whether only written or electronic resolutions are permitted.
Automated circular resolutions with consensus
With the digital Corporate Action Platform from Konsento revolutionizes the process for circular resolutions of the Board of Directors of Swiss stock corporations. It is the electronic template for the circular resolution of the Board of Directors.
- Guided processEvery step is legally secured and structured.
- Pre-formulated agenda itemsSaves time and ensures legal compliance.
- Automatic distributor: All BoD members are automatically included in the distribution list for the resolution
- Clear approval: Unambiguous approval options for Board members thanks to digitalization
- Automatic reminder functionBoard members who have not yet commented on the proposals can be reminded of their pending tasks at the touch of a button.
- Automatic loggingEvery decision is fully documented.
- 100 % digitalNo paperwork, no manual effort - simple, fast and efficient.
- Legally compliant: Process coordinated with lawyers and notaries.
With consento, the circular resolution on the fully automated processwhich makes the administration of stock corporations considerably easier. It is now available for all Premium customers to try out.
Conclusion
A Circular resolution is an efficient and flexible way of making Board of Directors decisions - especially for urgent, standardized or formal resolutions. The legal framework allows resolutions to be passed electronically as long as no member requests an oral discussion.
With the Corporate Action Platform from Konsento circular resolutions can be processed digitally, legally compliant and automated. Take advantage of a fully automated process and save valuable time in company management.
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