Directors' Resolution to Issue Shares

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What is it?

A Directors' Resolution to Issue Shares is a resolution required to be passed by the directors of the company to consider and approve the allotment and issue of new shares.

As with many of the decisions of the directors, a resolution must be made to approve any new issue of shares. Upon receipt of acceptances and any payments due for the shares, the board will issue the shares.

The directors' resolution can be passed at a directors' board meeting or by way of a written resolution.

Why do you need it?

A company cannot issue any of its shares unless the directors of that company approve such an issue of shares. To issue and allot new shares in your company, you must:

  • convene a board meeting at which the directors can approve and resolve to authorise the issue and allotment of the new shares. Alternatively a written resolution may be passed;
  • file the share allotment documents with ACRA (the Accounting and Corporate Regulatory Authority);
  • issue a new Share Certificate;
  • update the register of members; and
  • deliver the new Share Certificate.

If you choose to have a meeting of the board of directors to pass this resolution, it is necessary to record the minutes of this meeting. You will therefore need a Board Minutes to Issue Shares. Alternatively, the board resolution can be passed by way of a written resolution using a Board Resolution to Issue Shares.

Key clauses to watch for:

When drafting a Directors' Resolution to Issue Shares, it is important to focus on a number of key clauses, in particular:

  • Details of the company;
  • Details of the meeting (if using Board Minutes);
  • Date of passing the resolution;
  • Details of the applicant;
  • Unique Entity Number of the company;
  • Number of shares to be allotted and the value of the shares;
  • Price paid for the shares (if any); and
  • Total value of shares in issue.

Directors' Resolution to Issue Shares Document