Overview of a Shareholders’ Resolution to Issue Convertible Notes
What is a Shareholders’ Resolution to Issue Convertible Notes?
- if a general meeting (i.e. a meeting of shareholders) is convened to address the issue, use the Minutes of a General Meeting to Issue Convertible Notes; or
- if the company has only one shareholder or the shareholders choose to pass the resolution resolution by way of a written resolution, use the Written Resolution to Issue Convertible Notes.
Key points included
- Details of the meeting (if using Minutes of a General Meeting);
- Date of passing the resolution;
- Details of the investor(s);
- Approval and ratification of the term sheet and instrument; and
- Granting of authority to board of directors to execute term sheet and instrument, and issue convertible notes.
Notes on signing
- The Minutes of a General Meeting to Issue Convertible Notes should be signed by the chairperson of the meeting.
- The Written Resolution to Issue Convertible Notes should be signed by all the shareholders.