Overview of a Directors’ Resolution to Issue Convertible Notes (Initial Round)

What is a Directors’ Resolution to Issue Convertible Notes (Initial Round)?

-The Board Minutes to Issue Convertible Notes should be signed by the chairperson of the meeting.
-The Written Board Resolution to Issue Convertible Notes should be signed by the required majority of directors of the company. Under the Companies Act 2006, the required majority for an ordinary resolution to be passed by written means is a simple majority of the total voting rights of eligible members. Please also check the provisions of your Articles of Association.

When should you use a Directors’ Resolution to Issue Convertible Notes (Initial Round)?

-If a meeting of the board of directors is convened to address the issue, use the Board Minutes to Issue Convertible Notes; or
-If the board resolution will be passed by way of a written resolution, use the Written Board Resolution to Issue Convertible Notes.

Key points included

-Details of the meeting (if using Board Minutes);
-Date of passing the resolution;
-Details of the investor(s);
-Principal amount of subscription; and
-Company proposal to execute a Convertible Note Instrument.

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