Unanimous written consent is an invaluable asset when conducting board actions without a formal meeting. It’s especially helpful in cases of contentious matters or divided boards, and can guarantee all directors approve an action without needing a gathering in person.
Under Delaware law, consent must be signed in duplicate (separate signature pages) and filed with minutes of meetings of directors and stockholders. This makes it simpler to acquire signatures in multiple locations.
What is Unanimous Written Consent?
Unanimous written consent is a legal method for boards of directors to approve issues without holding an in-person meeting. This process is used when regular business meetings aren’t possible, such as when an issue must be decided quickly and cannot wait until later on.
This technique can speed up approvals and help cut down meeting time by eliminating unimportant agenda items. However, it should only be employed when there is unanimous agreement among board members and no contentious or controversial matter at stake.
If any director objects to a unanimous written consent, the board must call an in-person meeting and follow all the usual rules regarding quorum, prior notice and voting.
In addition to cutting meeting time in half, unanimous written consent can also save the company money by cutting expenses associated with room hire, travel and catering. This makes it a beneficial tool to have in your corporate voting arsenal when allowed by state law.
How Does Unanimous Written Consent Work?
The Delaware LLC unanimous written consent (also referred to as the “UWC”) is an invaluable document that documents your board’s collective wisdom on key business decisions like mergers, acquisitions and capital raising. It serves as a great way for management to communicate their priorities and get moving on key strategic initiatives that will position your company for long-term success.
The UWC is composed as an email to your board with a simple “vote yes.” Alternatively, you can use third-party board portal sites that enable text or email distribution through mobile device. For optimal results, utilize free or inexpensive online tools for creating and distributing this important corporate communication. In addition to simply including “vote,” make sure the UWC includes resolutions your board is voting on, relevant agreements and enough detail from the original meeting so informed decision-making can take place.
What Are the Advantages of Unanimous Written Consent?
Unanimous written consent is an invaluable asset for small-business owners. It enables boards to handle day-to-day matters like approving option grants or ordinary course contracts quickly and efficiently without the time commitment that meetings entail.
Additionally, board approval makes it simpler to show third parties that the board unanimously supported a particular action. This type of endorsement is also valuable evidence when applying for bank accounts by a company.
However, unanimous written consent can only be valid when all board members give their approval through signatures or electronic approvals. If even one director abstains or fails to deliver their consent, the process is invalid and another meeting must be called.
What Are the Disadvantages of Unanimous Written Consent?
Unanimous written consent may not be suitable for everyone. For instance, this option might not be ideal for companies with board directors located across the country and/or who struggle to schedule meetings at convenient times.
Some may feel the lack of formal board meetings can leave them with fewer chances to engage their unit owners and better serve the community they live in. This is especially pertinent in today’s digital age, where companies’ social media presences are crucial for maintaining their reputations and brand image.
Unanimous written consent can be a useful tool for boards to efficiently handle day-to-day matters such as approving option grants or signing official contracts without the hassle of in person meetings. But to get the most out of this process, select an advanced board management system that integrates with leading online tools tailored for the job.
