Reserved matters are decisions that require approval from specified owners, directors, or investors beyond ordinary management authority.
Definition
Reserved matters are actions listed in governing documents or investment agreements that cannot be taken without a designated approval. For a civil engineering firm, the list might include issuing shares, borrowing above a threshold, selling major assets, changing governing documents, or approving a sale. The approval may come from a board, a specific owner group, or holders meeting a stated voting threshold. Each firm sets its own list and procedures, so the label alone does not identify what needs approval. Reserved matters help define boundaries between management's delegated authority and decisions retained by owners or directors. They are not a complete governance system, and they do not necessarily cover routine operating choices such as project staffing or client billing. Owners review the list alongside voting rights, board authority, and transaction documents to understand when a decision requires special consent and how that consent is recorded.
How owners use it
- Owners check the reserved-matters list before taking on debt or issuing new ownership interests.
- A board confirms which approvals are required before a proposed sale can proceed.
- The firm records the required voters and approval threshold for a decision covered by its agreements.
