Being the sole director of a PTY

[Basment Dweller]

I am the sole director of the holding company of our family estate, the shareholding of the estate is 15% in my personal name and 85% in a trust of which my mother was the donner and my brother and I are the trustees (no independent).

As far as I understand, day to day decisions made at the company level i.e. small things: signing lease agreements, purchasing furnature big things: re-inveting capital in new propeties, paying dividends and salaries etc...are all up to me as the sole director, right?

What is the best way to keep track of all these decisions? I know directors need to pass resolutions but since I'm the sole director what's the point of passing a resolution document that is signed only by me?

Also what are the other responsibilities I have as company director?

[Justloadit]

The fact that you are the sole director does not detract from the record keeping.

I stand to be corrected here, last time I looked at this was during the last century

You have to have a minutes register, and every time that there is a "Director" meeting, you make insert the paper record into the minutes register.
In fact The Memorandum of Incorporation will clarify when a meeting is called, what has to be done to call a meeting, and the procedure required.

The Trust being the major shareholder must also give authority to elect a director, and this document must also be filed with the minutes register.

I am sure our learned forum members will elaborate further.

[sterne.law@gmail.com]

Where there is one director the director may exercise any power or perform any function of the board without notice or compliance with internal procedures unless the MOI says otherwise (section 57(2-6) Companies Act

[Basment Dweller]

Can I bump this thread to ask something else?

Can you have an even number of directors because if you have TWO directors and resolutions never get passed because they are always voting against each other, then what?

[CLIVE-TRIANGLE]

If there are two directors, and they disagree, then there is no resolution.

To carry a normal resolution, a simple majority is required. So it's 2 required for a Yes. A resolution is simply a decision that requires board of directors approval and if it can't get it, then the motion is rejected.

To carry a special resolution (applies to shareholders), a 2/3 majority of the voting rights is required.

The only way around the two director scenario is to share chairmanship on a round robbin basis, and the chairman has a deciding vote. But that would be required to be in the MOI (and seldom is).

[Justloadit]

Another way round this, is to issue one share to your auditor, purely used for voting purposes. Since the auditor has no financial interest in the company, his vote will be based on the best for the company.

[CLIVE-TRIANGLE]

Basement Dweller, if your question relates to the planned disposal that you posted in the accounting forum, then your concern actually relates to shareholders, not directors. This is because a disposal of significant assets requires a special resolution by the shareholders.

In the circumstances you explained, the shareholder is a family trust and the requirement to pass a special resolution rests with the trust, represented by the trustees.

Justloadit, your suggestion would disqualify the person from performing either an independent compilation, independent review or audit of the company because there would be no independence.

[Basment Dweller]

Hello Clive, thanks for your input, yes this question relates to the selling of property and other big ticket decisions that need to be made in the company.

Does a special resolution of shareholders also apply when BUYING new properties that would require a bond on the company assets as well as significant cash investment?

[CLIVE-TRIANGLE]

Purchasing property and registering a mortgage are two distinctly separate transactions. Purchasing property is the decision of the directors. Encumbering assets almost always requires a special resolution. The bank would almost certainly require it.