What it means
A small company needs to appoint an authorised bank signatory. The owners may be able to approve a decision in writing instead of gathering for a meeting.
They first have to establish who has power to make that decision and what procedure the company permits. The term can refer to a shareholders' decision, a board decision or a managers' decision, which are different bodies with different powers, so a document signed by all directors cannot authorise a matter reserved to shareholders simply because it is called a resolution.
Read the governing law, memorandum and articles, any shareholders' agreement and applicable authority rules. The UAE Commercial Companies Law provides a general legal framework, but a particular company may have its own constitutional and free-zone provisions, so do not apply a foreign template without checking jurisdiction.
A written process can save scheduling time for a straightforward decision and creates a dated record for banks, auditors and regulators. Speed is useful only if the notice, voting and documentation requirements are met.
Start with the exact decision, stating whether the signatories approve a contract, appoint a person, delegate authority or change a policy, because vague wording such as 'all related matters are approved' can give more power than intended. Name the relevant company by its legal name and registration details where needed, and identify the decision-making body and voters, confirming current appointments, share holdings, voting rights and any conflicts.
A former director or a shareholder without voting rights should not be counted toward the threshold. The required consent level may be unanimity, a simple majority or a higher threshold, and some matters may require a meeting, special notice, notarisation or regulator approval instead of an ordinary written vote.
The UAE Commercial Companies Law illustrates why one percentage does not settle the matter, since its provisions for company forms and managers use different approval rules and the company's memorandum can specify how joint managers make decisions in a particular form. A vote calculation is useful only after confirming the denominator: if 750 of 1,000 eligible votes approve, support is 75%.
That does not prove validity if the relevant rule requires more, if a signer lacks authority or if the procedure itself is unavailable. Circulate the same final text to every required signer, because version confusion can leave two incompatible documents in the minute book, and record signature dates and the effective date without backdating.
A resolution can state that it takes effect on adoption or after a specified condition, where lawful. Keep evidence of notice and consents, including the final text, attachments, signer list, approvals and any proof of filing, and remember that some decisions need external registration before they bind third parties, so calendar any filing and obtain acknowledgement; for an owner, the key question is whether the right body used an allowed procedure for the right entity, with the required consent, exact wording and follow-up filing.
In practice
Real-world examples.
Example
Eligible shareholders sign a properly authorised written decision to appoint a new company representative. The company secretary circulates one final text, collects dated signatures and files the signed copy in the minute book. The bank later accepts it as evidence of authority.
Example
Directors of a trading company review a bank mandate and confirm whether their governing documents permit written approval. They find that the articles allow it only if all directors sign. One director is travelling, so they wait for that signature rather than counting a majority.
Example
A company pauses a proposed written vote when it finds that the transaction requires special notice and a separate filing. The adviser sets out a timetable, with the notice period, the signing date and the registry submission. The delay costs a week but avoids a defective approval.
Formula
Calculation
Illustrative approval percentage = votes validly cast in favour / eligible voting rights x 100. Compare that figure with the actual threshold and procedural requirements; percentage alone does not establish validity.
Worked example. A fictional company has 1,000 eligible votes and 750 are cast in favour, so 750 / 1,000 x 100 = 75%. If the constitution needs a simple majority, 750 clears the 500 needed. If it needs at least 75%, the result meets the threshold exactly, and if it needs unanimity, the 250 votes that have not signed mean the resolution fails.
Now suppose 200 of the 1,000 votes belong to a holder who has no vote on this matter. The eligible base falls to 800, and 750 / 800 x 100 = 93.75%. The same signatures can therefore give a different percentage once the denominator is checked.Case study
Seen in the real world.
This entirely fictional example follows Atlas Trading, an invented UAE company. Managers circulated a short resolution to change a bank signatory but initially used the wrong group company name. Their adviser checked the correct legal entity, its memorandum and required signers before a fresh version was approved. Atlas kept the signed text and bank acknowledgement.
The story does not assume that every UAE company can use written resolutions for every decision. Afterwards, Atlas added a short checklist to its minute book covering the legal entity name, the decision-making body, the consent threshold, the signature dates and any filing. The next time a signatory changed, the finance manager completed the checklist before circulating the document. The bank accepted the paperwork at the first attempt.
Watch out
Common mistakes.
- Using a template for the wrong company, legal form or decision-making body.
- Treating a signature percentage as sufficient without checking the required procedure and threshold.
- Failing to keep the final signed version or complete a required filing.
Questions
People also ask.
What is a written resolution?
A company decision documented through an allowed written approval process rather than a conventional meeting vote.
Is it legally valid?
It can be, if governing law and documents permit the procedure and all voting and filing requirements are met.
Who signs?
The eligible directors, managers or shareholders for that specific decision, as determined by law and the company's documents.
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