---
title: "Directors' circulating resolution approving a share sale"
url: "https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/directors-circulating-resolution-share-sale"
type: "precedent"
site: "AI Law Framework"
id: "a2-directors-circulating-resolution-share-sale"
area_id: "A2"
kind: "other"
ai_level: "yellow"
version: 1
task_ids: ["A2-P20260916-2"]
law_stated_as_at: "2026-10-22"
---

# Directors' circulating resolution approving a share sale

> A circulating resolution for the directors of a proprietary company to approve entry into a share sale, and a short form for a sole director. It does not itself sign the sale agreement.

Canonical page: https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/directors-circulating-resolution-share-sale  
Law stated as at: 2026-10-22

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

- Kind: Other. A precedent that fits none of the other kinds.
- Practice area: [Mergers & Acquisitions / Private Equity](https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity.md)
- Jurisdictions: Australia
- AI level: Yellow. You and the tool draft together, with you directing. You check every statement you rely on.
- Law stated as at: 2026-10-22
- Status: Maintained. Checked on 2026-10-22 against the 3 authorities it cites, for Australia.

## When to use it

Use when the board of a buyer or a corporate vendor approves a share sale without holding a meeting. Check the constitution first: section 248A is a replaceable rule and may have been displaced.

## Used for these tasks

- [Reconcile company authorities for the signing pack](https://ailawframework.com/practice/mergers-and-acquisitions-private-equity/reconcile-company-authorities-for-the-signing-pack.md)

## How AI may be used

AI may prepare the resolution from the term sheet and the constitution extract; the lawyer checks that every director entitled to vote signs identical wording, and that the sale agreement is executed separately under section 127.

**AI may:**

- Insert the transaction description, the document titles and the names of directors entitled to vote
- Flag a constitution clause that replaces section 248A, if the extract is in the data room
- List the section 127 signatories separately from the directors who approve the transaction

**AI must not:**

- Must not treat the resolution as execution of the sale agreement
- Must not drop a director who is entitled to vote, or change the wording between counterparts
- Must not decide that a director with an interest may vote

**The lawyer checks:**

- The constitution adopts section 248A or sets out its own circulating-resolution rule, and that rule is followed
- Every director entitled to vote signs a document whose resolution and statement are identical, or the sole director records and signs under section 248B
- The resolution is passed only when the last director signs, and it is recorded in the minute book
- The sale agreement is executed in the way section 127 states, or under a power of attorney the lawyer has reviewed

## Authorities

- [Corporations Act 2001 (Cth) s 248A (replaceable rule: circulating resolution of a company with more than one director, passed when the last director signs; record in the minute books)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s248a.html)
- [Corporations Act 2001 (Cth) s 248B (sole director of a proprietary company may pass a resolution by recording and signing it)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s248b.html)
- [Corporations Act 2001 (Cth) s 127 (execution of documents, including deeds, by the company: two directors, or a director and secretary, or a sole director in the cases the section states)](https://classic.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s127.html)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/directors-circulating-resolution-share-sale and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*