Circular Resolution Template: How to Use It for Company Decisions

When you’re running a startup or small business, it’s not always practical (or necessary) to gather everyone in a boardroom every time a decision needs to be made.

That’s where a circular resolution comes in.

A circular resolution lets the decision-makers in your company approve a decision without holding a formal meeting. For many Australian startups and SMEs, it’s a genuinely useful way to stay organised, move quickly, and keep the right legal “paper trail” (even if your “paper” is digital).

Note: This article is general information for Australian businesses and isn’t legal advice. The rules can vary depending on whether your company is proprietary or public, whether you have a constitution, and what your shareholders agreement says. If you’re unsure whether a written resolution is valid for your situation, it’s worth getting legal advice.

In this guide, we’ll walk you through what a circular resolution is, when to use one, what to include in a circular resolution template, and how to sign and store it properly in Australia.

What Is A Circular Resolution (And Why Do Startups Use Them)?

A circular resolution is a written resolution that is passed without holding a meeting. Instead of everyone attending a meeting at the same time, the relevant decision-makers review a written resolution and sign to indicate approval.

In Australia, circular resolutions are commonly used by:

• Directors (for board decisions), and
• Shareholders/members (for member decisions).

For a startup or SME, the main benefits are practical:

• Speed: you can approve decisions quickly (handy when deadlines are tight).
• Convenience: directors or shareholders can be in different states (or time zones).
• Record-keeping: your company still has written evidence of decisions.
• Compliance: documenting decisions helps show your company is being run properly.

It’s also very common to prepare a circular resolution when you’re trying to keep your corporate admin neat-especially if you’re fundraising, onboarding a co-founder, entering a major contract, or preparing for due diligence.

If you’re still early-stage and haven’t formalised your structure yet, setting up properly from the start (including how you document decisions) often begins with your Company Set Up.

When Should You Use A Circular Resolution (Instead Of A Meeting)?

Not every decision needs a meeting, but some decisions definitely need to be properly documented.

As a rule of thumb, circular resolutions are great for decisions that are:

• Clear and specific (everyone understands what is being approved).
• Routine or administrative (eg opening a bank account, approving standard documents).
• Time-sensitive (eg signing before a deadline).
• Uncontroversial (where you expect everyone will agree).

Common Examples For Australian Startups And SMEs

Here are decisions we regularly see documented via circular resolution:

• Appointing or resigning a director or company secretary
• Approving entry into a major contract (eg supplier agreement, lease, key customer contract)
• Opening or changing bank accounts and authorised signatories
• Approving the issue or transfer of shares
• Approving a cap table restructure or allocating shares to founders
• Approving a new company policy (eg privacy, AI use, workplace policies)
• Approving the execution of documents under company signing rules

Where the decision involves co-owners and the rules around ownership and decision-making, it often sits alongside a Shareholders Agreement (or at least should be consistent with it).

When A Meeting Might Still Be Better

Sometimes a meeting is a better choice, for example when:

• There are multiple options to debate (not just “approve” vs “reject”).
• The decision is sensitive or contentious.
• You need robust discussion and a clear meeting record (minutes) for future protection.
• Your constitution or shareholders agreement requires a meeting for that type of decision.

If you’re unsure, it’s usually better to slow down slightly and document properly than to move fast with shaky governance.

What Makes A Circular Resolution Valid In Australia?

The exact requirements can vary depending on:

• whether it’s a directors’ resolution or a members’ resolution
• whether your company is proprietary or public
• your company’s constitution (if you have one), and/or
• any shareholders agreement or internal governance rules

Many companies adopt a Company Constitution to set out how decisions are made and documented, including rules about meetings, votes, and written resolutions.

Directors’ Circular Resolutions

A directors’ circular resolution (sometimes called a “circular directors’ resolution”) is used for decisions the board can make.

Under the Corporations Act, the replaceable rule for directors’ circulating resolutions generally requires all directors entitled to vote on the resolution to sign it for it to be passed (unless your constitution sets a different approach).

In practice, what you typically want to confirm is:

• Who needs to sign: commonly all directors entitled to vote on the resolution (unless your constitution says otherwise).
• What is being approved: the resolution wording must be clear.
• When it takes effect: often when the last required person signs (unless the resolution states otherwise).

If you need a starting point for the structure and wording, a Directors Resolution Template can help you align the format with common Australian company practice.

Shareholders’ (Members’) Circular Resolutions

A members’ circular resolution is used for decisions that shareholders/members must approve (for example, certain structural changes or major actions, depending on your constitution and the Corporations Act requirements).

This is an area where companies often get caught out, because the rules can differ depending on the type of company.

• Proprietary companies: the Corporations Act allows members to pass a resolution without a meeting if all members entitled to vote sign it (subject to any constitution requirements).
• Public companies: members’ written resolutions are generally not available in the same way, and member decisions will usually need to be made at a properly convened general meeting (unless a specific exception applies or your constitution permits a particular process).

Some member decisions also require:

• a certain voting threshold (eg ordinary resolution vs special resolution), and/or
• specific notice or procedural steps.

Even when the decision is unanimous, you still want the resolution drafted properly so you can show exactly what was agreed.

Signing And Execution: Getting The Formalities Right

One of the biggest mistakes we see is: the decision is agreed informally (often over email or Slack), but it’s never properly executed or stored.

To avoid that, you should make sure your resolution follows your company signing rules-especially if the resolution also approves execution of a document. Many companies rely on section 127 signing (a common way companies execute documents in Australia).

And yes-electronic signing is often workable, but you should be consistent and careful about how you do it. If you’re weighing up execution methods, it can help to understand the difference between wet ink signatures vs electronic signatures.

How To Use A Circular Resolution Template (Step-By-Step)

A well-drafted circular resolution template doesn’t just “look legal”-it helps you capture the right details in a way that stands up later if you ever need to prove what happened.

Here’s a practical step-by-step process you can follow.

1. Identify The Type Of Resolution

Start by clarifying whether this is:

• a directors’ circular resolution, or
• a members’ (shareholders’) circular resolution.

This matters because the signing and approval rules may differ.

2. Confirm Who Must Approve It

Check:

• your company constitution (if you have one)
• any shareholders agreement
• the Corporations Act requirements (where relevant)

For example, for many companies, a directors’ circulating resolution needs all directors entitled to vote to sign (unless the constitution modifies this). Member written resolutions for proprietary companies are generally unanimous (signed by all members entitled to vote), while public company member decisions will often need a meeting.

3. Draft Clear Resolution Wording

Keep it simple and unambiguous. A circular resolution is not the place for vague language.

Where relevant, include details like:

• the full legal name of the company
• the names of the directors or members signing
• the decision being approved
• any attachments (eg the contract being approved)
• the effective date

4. Attach Supporting Documents (If Needed)

If you’re approving entry into an agreement, attach the agreement (or clearly identify the final form version being approved). If you’re approving a share issue, attach the cap table or key terms.

This helps avoid confusion later about which version was approved.

5. Circulate For Signature

Send the resolution to each required director/member for signature.

As a practical tip: include a short email summary explaining what’s being approved and the deadline for signing. This improves turnaround and reduces “I didn’t realise what I was signing” misunderstandings.

6. Store It Properly In Your Company Records

After it’s signed, save it in your company records in a dedicated folder (for example “Corporate Records > Resolutions > 2026”).

Good record-keeping becomes increasingly important as you:

• bring on investors
• apply for finance
• sell the business
• go through audits or due diligence

What Should A Circular Resolution Template Include?

If you’re creating (or reviewing) your own circular resolution template, these are the sections we generally expect to see for Australian startups and SMEs.

1. Company Details

• Company name
• ACN (if applicable)
• Registered office address (optional but often included)

2. Heading And Type Of Resolution

For example:

• “Circular Resolution Of Directors”
• “Circular Resolution Of Members”

3. Background / Recitals (Optional But Helpful)

A short background can be useful where the decision might be questioned later.

For example:

• “The Company intends to enter into a supply agreement with .”
• “The Directors consider it in the best interests of the Company to approve the agreement.”

4. The Resolution(s)

This is the core. Common formats include:

• Approval: “It is resolved that the Company approve…”
• Authority: “Any director is authorised to do all things necessary…”
• Execution: “The Company is authorised to execute the document…”

If someone will sign on behalf of someone else (for example, where a person is authorised to sign in a representative capacity), it’s worth being careful about how that authority is documented. Depending on the scenario, an Authority To Act Form can help support that process.

5. Date And Effective Time

Many circular resolutions specify that they take effect:

• on the date of the last signature, or
• on a specific date nominated in the resolution.

Either approach can work-what matters is that it’s clear.

6. Signature Blocks

Include a signature block for each director/member who needs to approve the resolution, including:

• Full name
• Title (eg Director, Shareholder)
• Signature
• Date signed

If there are multiple pages, it’s also common to initial each page, particularly if attachments are included.

Common Mistakes With Circular Resolutions (And How To Avoid Them)

Circular resolutions are simple in concept, but there are a few common traps that can create real problems later-especially during fundraising, disputes between founders, or a sale.

Mistake 1: Using Vague Or Overly Broad Wording

If your resolution says something like “approved to enter into all necessary documents,” it can be unclear what was actually approved.

How to avoid it: name the document, counterparty, and date/version where possible.

Mistake 2: Not Getting The Right People To Sign

If your constitution (or the Corporations Act rule you’re relying on) requires all relevant directors or members to sign a written resolution, but only some sign, the resolution may not be valid.

How to avoid it: confirm approval thresholds (and whether unanimity is required) before circulating.

Mistake 3: Treating Emails As “Good Enough”

Email threads often get lost, and they don’t always clearly show what was agreed in final form.

How to avoid it: use a circular resolution template and store the signed copy in your records.

Mistake 4: Poor Record Keeping

Even if you pass a valid circular resolution, it won’t help you much if you can’t find it when you need it.

How to avoid it: maintain a central corporate records folder and consistent naming (eg “2026-01-15 Directors Circular Resolution - Bank Account.pdf”).

Mistake 5: Not Aligning With Your Other Governance Documents

If your shareholders agreement says certain decisions require investor consent, but you pass a circular resolution without that consent, you could be breaching your agreement even if the resolution looks “formally signed.”

How to avoid it: check consistency with your constitution, shareholders agreement, and any investor rights documents.

Key Takeaways

• A circular resolution allows directors (and, in some cases, shareholders/members) to approve company decisions in writing without holding a meeting, which can be ideal for busy startups and SMEs.
• A circular resolution template should clearly identify the company, the decision being approved, the effective date, and include proper signature blocks for all required parties.
• Always confirm who needs to approve the resolution (and what voting threshold applies) by checking whether your company is proprietary or public, your constitution, shareholders agreement, and relevant Corporations Act requirements.
• If your resolution involves signing a contract, pay close attention to execution rules (including section 127 signing where relevant) and keep your signing approach consistent.
• Storing signed resolutions properly is just as important as drafting them-good governance makes fundraising, due diligence, and scaling much smoother.
• When in doubt, getting the wording and process checked early can help prevent disputes, invalid decisions, and messy corporate records later.

If you’d like help preparing or reviewing a circular resolution template (or your broader company governance documents), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.