Elective resolution meaning

In company law practice, an elective resolution was a unanimous resolution used by a private company to opt into a lighter administrative regime under the Companies Act 1985. It allowed a private company to dispense with requirements such as holding an annual general meeting (AGM), laying accounts before a general meeting and annually appointing auditors. To be effective, it had to be passed at a general meeting by all members entitled to attend and vote, whether in person, by proxy or corporate representative, on 21 days’ notice unless all such members agreed to shorter notice. Elective resolutions were a statutory mechanism under the 1985 Act. The regime was repealed by the Companies Act 2006 (from 1 October 2007) and the term is now of historical significance in England & Wales, Scotland and Northern Ireland. Under the 2006 Act, comparable outcomes are achieved by default rules for private companies (for example, no compulsory AGM) and by using ordinary, special or written resolutions, or provisions in the articles, rather than “elective resolutions”. In Ireland, the Companies Act 2014 does not use the “elective resolution” terminology; similar objectives are addressed via the company’s constitution and ordinary, special or unanimous written resolutions.