Action without a meeting: Overview, definition, and example
What is action without a meeting?
Action without a meeting refers to the ability of a company’s board of directors, shareholders, or other governing body to approve decisions in writing without holding a formal meeting. Instead of convening in person or via conference call, decision-makers provide written consent to authorize actions such as corporate resolutions, financial approvals, or governance changes.
For example, a company’s board may need to approve an urgent business transaction. Instead of scheduling a formal meeting, all directors sign a written consent document approving the decision.
Why is action without a meeting important?
Action without a meeting is important because it allows businesses to make decisions efficiently without the delays of scheduling and conducting formal meetings. It ensures flexibility while maintaining legal validity for corporate actions.
For businesses, including an action without a meeting clause in governing documents or agreements ensures that critical decisions can be made quickly, provided that all necessary approvals are obtained in writing.
Understanding action without a meeting through an example
Imagine a startup’s board of directors needs to approve a contract for a major partnership. Instead of waiting for the next scheduled meeting, the directors each sign a written consent resolution, allowing the contract to be executed immediately. This action without a meeting ensures that the company does not miss a business opportunity due to scheduling conflicts.
In another scenario, shareholders of a private company need to approve an amendment to the corporate bylaws. Since all shareholders agree, they sign a unanimous written consent, making the change legally binding without requiring a formal meeting.
An example of an action without a meeting clause
Here’s how an action without a meeting clause might appear in an agreement:
“Any action required or permitted to be taken at a meeting of the Board of Directors or Shareholders may be taken without a meeting if written consent setting forth the action is signed by the required majority of Directors or Shareholders, as applicable.”
Conclusion
Action without a meeting allows corporate decisions to be made efficiently without the need for a formal gathering. It ensures that important matters can be approved swiftly while remaining legally binding.
By including an action without a meeting clause in bylaws, agreements, or corporate governance documents, businesses can streamline decision-making, maintain flexibility, and ensure compliance with legal requirements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.