Resolutions 101: The Difference Between “We Chatted About It” and “We Actually Decided It”

If minutes are the record of what happened at a meeting, resolutions are the record of what the board or members actually decided. Mixing the two up is one of the most common governance mistakes directors make — and it’s an easy one to fix once you know the difference.

What is a resolution, exactly?

A resolution is a formal decision, recorded and — depending on the type — voted on according to specific rules. Think of it as the difference between “we think we should probably open a new bank account at some point” and “resolved: the company shall open a new bank account with XYZ Bank, and directors A and B are authorised as signatories.” One is a conversation. The other is an instruction the world can act on.

Banks, SARS, CIPC, and pretty much any third party dealing with your organisation will want to see a resolution — not a vague reference in the minutes — before they’ll act on major changes.

Ordinary vs special resolutions

This is where a lot of directors get tripped up, so here’s the plain-English version:

Ordinary resolutions need a simple majority (more than 50% of votes). These cover the everyday stuff — appointing directors, approving financial statements, routine business decisions.

Special resolutions need a higher threshold, typically 75%, as set out in the Companies Act or your Memorandum of Incorporation (MOI). These are reserved for the big-ticket items: amending the MOI, changing the company name, approving a merger, or authorising financial assistance to a director. The higher bar exists precisely because these decisions are harder to undo.

Your MOI can actually change these percentages within limits — which is exactly why every director should read their MOI at least once, ideally before there’s a crisis, not during one.

When do you actually need a written resolution?

Not every decision needs a formal resolution — but these definitely do:

• Opening or closing bank accounts, or changing signatories
• Appointing or removing directors
• Approving loans, guarantees, or financial assistance
• Approving major contracts or capital expenditure above a set threshold
• Declaring dividends (Pty Ltd) or approving major expenditure (NPC)
• Any change requiring a special resolution under the Companies Act (name change, MOI amendment, etc.)

If a bank, auditor, or SARS is ever going to ask “can you prove the board approved this?” — that’s your cue that you need a resolution, not just a mention in the minutes.

Round-robin resolutions (the “we can’t all get in one room” option)

Both Pty Ltds and NPCs can pass resolutions without holding a physical meeting, provided the Companies Act and your MOI allow it — usually via a written resolution circulated to and signed by the required majority of directors or members. This is a lifesaver for smaller boards and volunteer-run NPCs where getting everyone in a room on the same evening is basically a logistical miracle. Just make sure it’s properly documented and signed; a WhatsApp thread saying “yes fine by me ????” does not count as a resolution, however tempting that shortcut looks at 9pm on a Tuesday.

The NPC angle

For non-profits, resolutions matter just as much — sometimes more, because NPC boards often have less institutional memory (volunteer turnover is real) and more scrutiny from funders. A resolution approving a major donor agreement or a change in project direction gives your board a clear, defensible paper trail showing the decision was made properly, by the right people, with the right authority.

The bottom line

Minutes tell the story. Resolutions are the legally binding punchline. If money, authority, or the company’s structure is changing, don’t just talk about it — resolve it, record it, and get it signed.