What Is a Unanimous Written Consent?
A unanimous written consent is a corporate or LLC governance document in which all of the owners of a business — all shareholders of a corporation, or all members or managers of an LLC — formally approve a specific action or transaction without holding a formal meeting. Rather than calling and noticing a meeting, having a quorum present, and taking a recorded vote, the owners simply sign a written document confirming their unanimous agreement to the proposed action.
In the context of a business acquisition, a unanimous written consent is one of the key closing documents. The seller’s company is required to demonstrate that its owners have formally authorized the sale — that is, that the company has corporate or LLC authority to enter into and close the transaction.
Russo Law LLC prepares and reviews unanimous written consents and other corporate authorization documents for business transactions throughout New York and New Jersey.
When Is a Unanimous Written Consent Required?
Certain major business decisions require formal owner approval under New York and New Jersey corporate and LLC law, as well as under most operating agreements and shareholder agreements. Requirements vary depending on the entity type, the governing documents, and the specific transaction, but common situations where formal authorization is needed include:
- Sale of substantially all assets — a sale of all or substantially all of the company’s assets typically requires shareholder or member approval under New York and New Jersey law
- Merger or consolidation — fundamental changes to the corporate or LLC structure generally require formal owner approval
- Dissolution — winding up and dissolving the company typically requires owner authorization
- Amendment of governing documents — changes to the certificate of incorporation, bylaws, or operating agreement
- Issuance of new equity interests — in many closely held companies, issuing new shares or membership interests requires owner approval under the governing documents
What Does a Unanimous Written Consent Include in a Business Sale?
In the context of a business asset purchase or equity sale, the seller’s unanimous written consent typically includes:
- A recital identifying the company and the transaction being approved
- A resolution approving the specific transaction — the asset purchase agreement, membership interest purchase agreement, or stock purchase agreement
- Authorization for specified officers or managers to sign the purchase agreement and all closing documents on behalf of the company
- Approval of all other actions necessary to consummate the transaction
- Signatures of all shareholders, members, or managers (depending on the entity type and governing documents)
Unanimous Written Consent vs. Corporate Resolution
A unanimous written consent and a corporate resolution serve similar purposes but differ in how they are adopted. A corporate resolution is a formal action taken at a duly noticed and constituted meeting of shareholders, directors, or members — with a quorum present and a vote recorded in meeting minutes.
A unanimous written consent is an action taken without a meeting, by written agreement of all required owners.
Both are generally legally effective in New York and New Jersey, and written consents are often faster and simpler for closely held companies with a small number of owners. Which approach is appropriate in any specific situation depends on the governing documents and applicable law.
Frequently Asked Questions — Unanimous Written Consents
Does a unanimous written consent need to be notarized?
Generally no — a unanimous written consent does not need to be notarized to be legally effective in New York or New Jersey. It does need to be signed by all required owners or authorized signatories. Some transactions or counterparties may request notarization as an additional assurance, and your attorney can advise whether notarization is appropriate for your specific transaction.
What if one owner refuses to sign the unanimous written consent?
If the company has multiple owners and one refuses to sign, a unanimous written consent cannot be used. The parties would need to either hold a formal meeting with proper notice and take a vote (if the transaction can be approved by less than unanimous consent under the governing documents and applicable law), or address the hold-out owner’s concerns. In some cases a minority owner’s refusal to authorize a sale can itself give rise to a business dispute requiring legal involvement.
he appropriate next steps depend on the governing documents, the applicable law, and the specific facts. Russo Law LLC advises business owners on governance disputes and transaction authorization issues throughout New York and New Jersey.
Schedule a Free Consultation
If you are buying or selling a business in New York or New Jersey and have questions about corporate authorization or unanimous written consents, call 929-262-1101 or schedule a free consultation with Russo Law LLC.
The information on this page is general in nature and does not constitute legal advice. Every situation involves unique facts, and no specific strategy or recommendation can be made without a full review of your circumstances.