What is a Unanimous Written Consent?
This post explains what a Unanimous Written Consent is. (Sometimes it is called an Action by Unanimous Written Consent.)
The term Unanimous Written Consent typically is used in the context of a corporation, which is the focus of this post. However, it can pertain to limited liability companies and other types of legal entities, as well.
Meetings of Corporate Bodies
Traditionally, corporate bodies, such as shareholders or the board of directors, act at meetings. The corporate secretary prepares minutes of the proceedings and any resolutions that the body approved. The minutes are filed in the corporate records book.
However, meetings require that participants be available at a given time. Also, the meetings can drag on for longer than is required to transact the business at hand.
Unanimous Written Consent Avoids a Meeting
The Unanimous Written Consent offers a way to avoid the negative aspects of some meetings. If the subject matter to be addressed is well-defined and the members of the body are in agreement, the secretary prepares a Unanimous Written Consent that includes the relevant written resolutions. The members sign the Consent, and the secretary files it in the records book with meeting minutes.
The “Unanimous” in Unanimous Written Consent reflects the fact that board of director consents typically must be approved by all board members. See, e.g., California Corporations Code Section 307(b) and Delaware General Corporation Law Section 141(f).
Shareholder Consents Need Not Be Unanimous
Shareholder consents, in contrast, typically require only the approval of as many shares as would be required if the action were voted on at a shareholder meeting. See, e.g., California Corporations Code section 603(a) and Delaware General Corporation Law Section 228(a).
So if you want to avoid meetings while complying with applicable corporate laws, you need to know about the Unanimous Written Consent.
Dana H. Shultz, Attorney at Law +1 510 547-0545 dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.