Company Minutes keep official account of what decisions are made by the Company. These are often recorded and kept for statutory purposes. Very simply, the Annual Minutes (including Shareholders and Directors Resolutions) collectively declare that a Company is meeting all its legal obligations.
Directors vs Shareholders: Directors run a company while shareholders own the company. Often these roles are filled by the same person (a director will often also be a shareholder), separate resolutions must be prepared and signed under these different "hats".
Annual General Meeting (“AGM”): Under the Companies Act 1993, if a company is not considered to be a “Large Entity” (i.e 60m+ assets, $30m+ revenue or 10+ shareholders) it may pass a resolution rather than hold an AGM.
Directors' Certificate: The Directors must certify that payments made to them for fees, salaries, wages etc are fair to the Company taking into account the market rates for companies of a similar size, and is commensurate with the experience, time, effort and skills provided by the Directors. The Directors also need to certify that any advances made to/from Shareholders/Directors are fair to the company and are charged interest at the appropriate rates.
Directors’ Resolution: this will approve and adopt the annual financial statements, authorise remuneration to shareholders/directors and approve any advances made to/from shareholders/directors.
Shareholders’ Resolution: Shareholders will only need to approve the annual financial statements and approve any major transactions during the year. Historically shareholders have also decided on whether to appoint an auditor, but this is no longer a requirement.
What is a Company Minute Book?
Shareholders' Resolutions, Directors' Resolutions and Directors’ Certificates Minutes, together with the financial statements are added to the company minute book. Directors who fail to keep adequate records can be liable for penalties under the Companies Act, so it's important to have this stored at the company registered office.