A bank, a registry or a company’s own counterparty that asks for a resolution rarely says whether it wants one passed by the board or one passed by the shareholders, and the question of board resolution vs shareholder resolution is not a matter of house style. It turns on which body the company’s own constitution gives the power to decide. Bring the wrong one and the document does not do what it says it does, which is a defect in authority rather than a formality that gets waved through.
Both instruments record a decision that has already been taken. Neither creates the decision itself, and a resolution dated after the event it is meant to authorise is defective on its face, whichever body signed it.
Board or shareholders, and why it matters
The board runs the company day to day. The shareholders own it, and the memorandum reserves certain matters to them rather than to the board, typically the decisions that change the company itself rather than what it does: the constitution, the share capital, who the shareholders are, and whether the company continues to exist.
Where a matter is reserved to the shareholders, a board resolution approving it is the wrong document, and a receiving party that has read the constitution will say so. The rule before drafting anything is to read the memorandum first and confirm which body the decision belongs to. That check takes minutes, and it is the one most often skipped.
What each one has to show
The three checks on a board resolution
Authority. Do the people signing actually hold the power the constitutional documents give them, traced through the memorandum and through any earlier resolution that conferred it.
Quorum. Did the meeting satisfy whatever the memorandum requires. A resolution passed without quorum is challengeable, and a receiving party that spots it will not act on it.
Wording. Does what is resolved match what the receiving party will actually be asked to do. A resolution approving the opening of a bank account is not the same as one approving a named signatory with named limits, and the bank will want the second.
What a shareholder resolution has to show
Who the shareholders are, as recorded in the constitutional documents rather than as everyone assumes. Where a transfer has happened and the memorandum has not caught up, the register and the reality disagree.
That they hold what they are said to hold, where the memorandum sets a percentage threshold for the decision. That the required majority was reached, made visible on the face of the resolution rather than left to be inferred. And where a shareholder is itself a company, that the individual signing for it has authority to do so, evidenced separately. Raising this at first contact rather than on the day avoids one of the more common causes of delay.
What each resolution usually covers
Board resolutions typically approve:
- Appointing or removing a general manager
- Changing authorised signatories, and the limits on their authority
- Approving a transfer of shares between existing or incoming shareholders
- Approving the opening of a branch or a subsidiary
- Ratifying a power of attorney already granted
- Authorising a specific transaction, contract or borrowing
Shareholder resolutions typically approve:
- Amending the memorandum of association
- Increasing or reducing share capital
- Admitting a new shareholder, or approving a transfer of shares
- Changing the company’s activity or trade name
- Appointing or removing a manager, where the memorandum reserves it
- Approving liquidation, dissolution or a change of legal form
Which of these actually applies to a given company depends on its own memorandum. A share transfer, for instance, can go either way: which body has to approve it depends on what the constitution reserves, so it is checked case by case rather than assumed from a list.
What to bring
For a board resolution: the current trade licence, the memorandum and every amendment, identity documents for everyone signing, any earlier resolution the signing authority relies on, and the draft resolution or a description of what has to be approved.
For a shareholder resolution: the trade licence and the memorandum with all amendments, since the memorandum decides who signs and what majority is needed, identity documents for every signing shareholder, evidence of authority for any corporate shareholder, and the draft resolution or a description of what the receiving party has asked for.
Both languages, and which one governs
We draft every resolution in Arabic and English side by side rather than translating one after the other, because a signatory who cannot read what he is signing is a problem for everyone who later has to rely on the document. A governing language clause settles in one sentence which text prevails if the two ever diverge, and every amendment goes into both texts or into neither.
The published fee
| Board resolution | Shareholder resolution | |
|---|---|---|
| Who passes it | The board | The shareholders |
| Typical matters | Signatories, a general manager, a specific transaction, ratifying a power of attorney | Amending the memorandum, share capital, admitting a shareholder, liquidation |
| What is checked | Authority, quorum, wording | Who the shareholders are, their holdings, the majority reached |
| Published fee | AED 2,000. The Dubai Courts fee is separate and passed on at cost. | Not separately published. Send the draft and we will confirm the figure. |
We are a document services provider, not a notary and not a law firm: we draft, check and arrange, and the notarial act itself is performed by a Dubai Courts notary.
Send us the draft, or tell us what was decided and by whom, and we will tell you whether it should be a board resolution or a shareholder resolution before you commit to either, and whether it will be accepted as drafted. There is no charge for the reading. Send the draft, and see the full fee schedule and how the notarisation process works.
Questions people ask
Do we need a board resolution or a shareholder resolution?
It depends on what the memorandum reserves to each body. Send us the decision that has to be recorded and we will tell you which one applies before you draft anything.
Can a board resolution approve a share transfer?
Sometimes. Which body has to approve a transfer of shares depends on what the company’s own memorandum reserves, so this is checked case by case rather than assumed.
What happens if quorum was not met?
A resolution passed without quorum is challengeable, and a receiving party that spots the gap will not act on it. The memorandum sets the quorum requirement and the resolution should show it was satisfied.
Does the resolution have to be in Arabic?
We draft every resolution in Arabic and English together, with a governing language clause settling which text prevails if they diverge. See our FAQ for more on how that works.
What does a board resolution cost?
Our fee for a board resolution is AED 2,000. The Dubai Courts fee is separate and passed on at cost. A shareholder resolution’s fee is not separately published, so send the draft and we will confirm the figure.