Introduction to this document
Written record of decision by sole shareholder
It’s common for small companies to have a sole shareholder. If your company does, one of the special rules that applies is the requirement to make a written record of any decisions made by the shareholder.
Special rules
One of the requirements in place to keep the identity of the company separate from that of its sole shareholder and also to make sure that proper records are kept is for a sole shareholder’s decisions to be recorded in writing. This rule ensures that decisions equivalent to those made by a company with more than one shareholder at a meeting or by written resolution are recorded for future reference. The decision must be recorded whether it was made at a meeting, e.g. at which the sole shareholder is briefed by the directors, or by the sole shareholder on their own.
Failure to do so does not invalidate the decision, but the sole shareholder is liable to a fine.
Document
24 Oct 2018