S249A Corporations Act: Circulating Resolutions Explained

Need to pass a members’ resolution quickly without calling a meeting? Section 249A of the Corporations Act 2001 (Cth) lets proprietary companies use a “circulating resolution” so members can approve decisions in writing.

In this guide, we’ll explain how s249A works in Australia, when you can use it (and when you shouldn’t), the steps to pass a circulating resolution properly, and the practical rules around electronic signatures, counterparts and record-keeping.

Our goal is to make this simple and actionable, so you can keep your company moving while staying compliant.

What Is A Circulating Resolution Under Section 249A?

Section 249A allows a proprietary company’s members to pass a resolution without holding a general meeting, if every member entitled to vote on the resolution signs a document containing a statement that they are in favour of the resolution.

Key points in plain English:

• It applies to proprietary companies (Pty Ltd), not public companies.
• Unanimity is required: all members entitled to vote on that resolution must sign.
• Members can sign identical copies (on separate pages). The resolution is taken to be passed when the last member signs.
• Both ordinary and special resolutions can be passed by circulation-provided every eligible member signs in favour.

This option is popular for small or closely-held companies because it’s fast, avoids scheduling a meeting and still creates a clear written record of the decision.

When Can You Use S249A (And When Not)?

Most member decisions that could be made at a general meeting can be made by circulating resolution under s249A, as long as the all-members-sign requirement is met.

However, there are some important limits:

• Your Company Constitution may set additional rules. For example, it might require certain decisions to be made only at a meeting, or prescribe extra notice or content requirements for particular resolutions. Review your Company Constitution before proceeding.
• If legislation requires a meeting (for example, where a member or auditor has statutory rights to be heard at the meeting), a circulating resolution is not appropriate. A classic example is removing an auditor, which is subject to special notice and hearing rights. In those cases, use a properly convened general meeting.
• Watch eligibility to vote. Only members entitled to vote on the resolution have to sign. If some shares don’t carry a right to vote on that question, those holders don’t need to sign.

Where unanimity is hard to obtain-say, in a company with many shareholders or divergent interests-it may be more practical to hold a meeting and pass an ordinary resolution (more than 50%) or special resolution (at least 75%) through the usual voting thresholds. If your company has multiple founders or investors, a clear Shareholders Agreement can also set expectations for how major decisions get approved.

How To Pass A S249A Member Resolution: Step-By-Step

Here’s a straightforward process you can adapt for your company.

1) Confirm You Can Use A Circulating Resolution

• Check that your company is a proprietary company.
• Review your Company Constitution to ensure there’s no requirement to decide this specific matter at a meeting. If you’re on replaceable rules or your constitution is outdated, consider whether it’s time to adopt a constitution that fits how you operate.

2) Draft The Resolution Clearly

• Use clear, specific wording so members know exactly what they’re approving. For special resolutions, identify that it is a “special resolution.”
• Include the date, company details and space for each signing member’s full name, capacity (e.g. trustee or corporate member representative, if applicable) and signature.
• If you’re adjusting governance documents (like adopting a new constitution or approving selective buy-backs), attach the final version being approved.

3) Circulate To All Members Entitled To Vote

• Send the same resolution to every voting member. Email is fine if your constitution permits electronic communications (most modern constitutions do).
• Make it easy to sign: include instructions for e-signing, and confirm the deadline (if time-sensitive). If a corporate member is signing, ensure the signatory has proper authority-Section 126 of the Act deals with the authority of a company’s officers and agents, explained here: Section 126.

4) Collect Signatures (All Of Them)

• You must obtain a signature in favour from each voting member. If even one eligible member refuses or doesn’t respond, the s249A resolution cannot pass.
• Members can sign on separate, identical copies. This is commonly called execution in counterparts-see how “signed in counterpart” works in practice.
• Electronic signatures are generally permitted and widely used. If you’re weighing e-sign vs pen-and-paper, this guide covers the basics: wet ink vs electronic signatures.

5) Date And Record The Resolution

• The resolution is taken to be passed on the date the last eligible member signs.
• Keep a complete record (all signed copies, covering email trails, attachments). Under the Act, companies must keep minute books and records of resolutions-best practice is to file the signed resolution with your company minutes within one month.
• If the resolution triggers any ASIC lodgements (for example, a change of company name or share structure), file the relevant forms on time.

6) Follow-On Documents Or Filings

• Some member decisions require additional documentation (for example, adopting a new constitution, approving a share issue or buy-back, or entering major transactions). Make sure any follow-on documents are properly executed. For documents executed by the company itself, see executing under section 127.
• Where the outcome needs board action (e.g. implementing the member decision), prepare a board resolution. If you need a starting point, a Directors’ Resolution can formalise the next steps.

Ordinary Vs Special Resolutions: What Changes Under S249A?

At a meeting, different voting thresholds apply depending on the type of resolution:

• Ordinary resolution: more than 50% of votes cast.
• Special resolution: at least 75% of votes cast, and additional notice requirements may apply.

By contrast, a circulating resolution under s249A requires unanimous approval from all members entitled to vote-regardless of whether the resolution is ordinary or special.

What this means in practice:

• For small, aligned shareholder groups, circulating resolutions are efficient.
• For larger cap tables or where the matter is contentious, a properly convened meeting may be more realistic because unanimity can be hard to achieve.
• Special resolutions by circulation should clearly say they are “special resolutions,” set out the precise wording, and still be signed by every eligible member.

S249A Vs S248A: Members’ Circulating Resolutions Vs Directors’ Circulating Resolutions

It’s easy to mix these up, so here’s the distinction:

• S249A deals with members’ resolutions by circulation (shareholders signing instead of holding a general meeting).
• S248A deals with directors’ resolutions by circulation (the board signing instead of holding a directors’ meeting)-often used for day-to-day approvals.

Many proprietary companies rely on both tools at different times. A board might approve operational matters via s248A, while fundamental company decisions (like adopting a new constitution, approving major share transactions or changing the company name) will typically go to members under s249A.

As a general rule, check the Act, your constitution, and any investor arrangements to confirm who has the power to decide a particular matter and which process to use. For significant governance items, the decision-making framework in your Shareholders Agreement and constitution will often be the starting point.

Electronic Signatures, Counterparts And Document Types: Practical Tips

Modern company administration is largely digital, and circulating resolutions are no exception. A few practical points:

• Electronic signatures: Generally acceptable unless your constitution or the specific law requires a particular form. Keep a clean audit trail (email, e-sign certificate, time stamps). If you need to understand company execution methods, see executing documents under section 127.
• Counterparts: Perfectly normal-members can each sign an identical copy. For background, here’s a plain-English explainer on signed in counterpart.
• Resolutions vs deeds: A circulating resolution is a company decision record. If you are formalising a promise that needs to be a deed (for example, a deed poll or deed of release), you’ll follow deed execution requirements instead-this overview of what is a deed explains how they differ from simple agreements.
• Authority to sign: Where a member is a company, confirm the person signing has authority (see Section 126 on authority of officers and agents).

Finally, make sure your internal minute books are up to date. Accurate and timely records aren’t just good governance-they’re required by the Corporations Act and make later due diligence much smoother if you raise capital or sell.

Common Use Cases For S249A (With Drafting Tips)

• Adopting or replacing a constitution: Attach the full text of the proposed constitution and use a special resolution label. If you’re modernising governance, consider whether it’s time to adopt a constitution tailored to how you operate today.
• Approving a share issue or transfer: State the class, number of shares, consideration, pre-emptive rights position (if applicable) and any ASIC filings to follow. Your constitution and any investor agreements will guide the mechanics.
• Company name change: Set out the proposed name, note that availability checks and ASIC lodgement will follow, and identify who will file.
• Selective buy-back or capital reductions: These are technical-draft carefully and follow the specific Corporations Act procedures (including member approval type and ASIC notices). Legal advice is recommended for capital management actions.

Where the member decision will then be implemented by the board, follow up with a directors’ resolution to action what the members have approved. A concise Directors’ Resolution keeps your board file tight and consistent.

Key Takeaways

• S249A lets proprietary companies pass members’ resolutions in writing without a meeting-but you need unanimous approval from all members entitled to vote.
• Check your Company Constitution and the Corporations Act before using a circulating resolution; some decisions still need a meeting (for example, where the Act gives hearing rights).
• Draft the resolution clearly, circulate to all voting members, collect every signature (counterparts and e-signatures are fine), and file the signed resolution in your minute books.
• For special resolutions by circulation, label them as such and keep attachments (like a new constitution) with the signed record.
• Where the outcome requires company execution or follow-on steps, use proper execution methods under section 127 and support it with a board resolution.
• Good records aren’t optional-timely, complete minute books make compliance easier and due diligence faster.

If you’d like a consultation on drafting or implementing circulating resolutions under s249A for your Australian company, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.