What Is a Circular Resolution? How Boards Decide Without Meeting

A circular resolution is a written document that allows a board of directors to pass a decision without holding a meeting. Directors sign the document to indicate their approval, and the resolution passes when the last required signature is received.

Circular resolutions are also called circulating resolutions, flying minutes, or board resolutions. They are best suited to routine, uncontroversial matters that need to be approved between scheduled board meetings.

Before using circular resolutions, check your organisation’s constitution to confirm they are permitted and what approval threshold applies.

For companies subject to the Corporations Act 2001 (Cth), section 248A is a replaceable rule that allows circular resolutions:

248A The directors of a company may pass a resolution without a directors’ meeting being held if all the directors entitled to vote on the resolution sign a document containing a statement that they are in favour of the resolution set out in the document. Separate copies of a document may be used for signing by directors if the wording of the resolution and statement is identical in each copy. The resolution is passed when the last director signs.

What should a circular resolution contain?

A circular resolution should include background information explaining why the decision is needed, and the specific resolution being proposed. For example, if the board is approving a new subsidiary, the document might cover the rationale, costs, and a summary of the business case, followed by the proposed resolution.

Under section 248A, all directors entitled to vote must sign. However, because s248A is a replaceable rule (see below), the organisation’s constitution can modify this — for example, allowing a majority (more than 50%) or special majority (typically 75%) of directors to pass the resolution.

Can a directors report be approved by circular resolution?

Whether a directors report can be approved by circular resolution depends on the organisation’s bylaws and applicable legislation.

Under the Corporations Act, financial statements must be approved by a resolution of the directors (s 295(5)), and the directors’ report must be approved and signed before being sent to members. The Act does not explicitly require these approvals to happen at a meeting — a circular resolution may technically suffice if the constitution permits it.

Directors should have the opportunity to ask questions and satisfy themselves that the accounts are accurate before signing off. In practice, approving these documents at a board meeting is the better approach.

Who can circulate a circular resolution?

The company secretary or another officer designated by the board typically circulates the resolution. They are responsible for sending it to all directors entitled to vote, recording the results, and reporting the outcome to the board.

The resolution should include clear instructions on how directors indicate their approval, the voting threshold required, and a deadline for responding.

Can a director resign via circular resolution?

A director’s resignation does not require a circular resolution. Under the Corporations Act, a director can resign by giving written notice to the company at its registered office (s 203A). The timing of when the resignation takes effect is governed by s 203AA, which requires notification to ASIC within 28 days.

A circular resolution might be used by the remaining directors to formally note the resignation and deal with any consequential matters (such as appointing a replacement), but the resignation itself is a unilateral act by the director — it does not need board approval.

The resignation should be recorded in the minutes of the next board meeting and notified to ASIC within 28 days.

What cannot be approved through circular resolution?

Circular resolutions are for board (director) decisions. Matters that require a resolution of members at a general meeting cannot be handled by circular resolution. Under the Corporations Act, these include:

• Removal of directors (public companies) — requires an ordinary resolution at a general meeting (s 203D).

Note: In proprietary companies, members can remove a director by resolution (s 203C), unless the constitution says otherwise. This is a members’ resolution and cannot be passed as a directors’ circular resolution under s 248A. However, under s 249A, members of a proprietary company can pass this resolution by a members’ circulating resolution without holding a general meeting, provided all members entitled to vote sign.

• Amending the constitution — requires a special resolution (s 136). For public companies this means a general meeting; proprietary companies may use a members’ circulating resolution under s 249A.
• Appointment or removal of auditors — appointment is governed by ss 327A–327C and generally occurs at a general meeting; removal requires a resolution at a general meeting under s 329.

Some matters are technically board decisions but are better handled at a meeting because of their complexity or the discussion they warrant. Financial statements, for example, must be approved by the directors (s 295(5)) and can legally be approved by circular resolution if the constitution allows it, but should normally be discussed in person.

Does a resolution have to be signed by all directors?

Under section 248A of the Corporations Act, yes — all directors entitled to vote must sign. This is a high bar: a single director who refuses to sign (or is unavailable) can block the resolution.

Because s248A is a replaceable rule, the organisation’s constitution can set a lower threshold — a majority (more than half) or a supermajority (commonly two-thirds or three-quarters).

How do you write a board resolution?

A board resolution should include:

1. Title and date — what the resolution is about and when it is proposed.
2. Background — the context and reasons for the decision, including any supporting information.
3. The resolution — the specific decision or action being proposed, in clear language.
4. Authorisations — if the resolution requires someone to take action (such as signing a contract), name the person and the scope of their authority.
5. Voting threshold — the approval requirement (unanimous, majority, or supermajority).
6. Signature block — space for each director to sign, with the date of signing.

Keep a copy of the signed resolution on file. It forms part of the organisation’s governance records alongside the minutes.

How many directors are needed to pass a resolution?

For resolutions at a board meeting, a majority of directors present (provided a quorum is present) is the standard threshold. For circular resolutions, the default under the Corporations Act is all directors entitled to vote (s 248A), unless the constitution sets a different threshold.

Can directors pass written resolutions?

Yes. Section 248A of the Corporations Act expressly allows directors to pass resolutions in writing without a meeting, provided the requirements are met (see above). Many incorporated associations’ constitutions also permit written resolutions.

A circular resolution has the same legal effect as a resolution passed at a board meeting, provided it complies with the constitution and applicable legislation.

Do circular resolutions need to be unanimous?

Under the Corporations Act default (s 248A), yes — all directors entitled to vote must sign. As noted above, the constitution can set a lower threshold such as a majority or supermajority.

Is there a tool for distributing a circular resolution?

Our Cat Herder has a built-in circular resolution tool. Board members log in and cast their vote securely, with results available as soon as everyone has voted. You can set time-limited votes, send reminders, and attach relevant files.

Related Terms

Flying Minutes

Minutes

Quorum

Board of Directors

Additional Resources

Free Minute Health Check

Flying Minutes

Delegation of Authority