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What is an Approve Company’s Financial Statements?

A Directors’ Resolution to Approve Company’s Financial Statements is a resolution passed by the directors of a company to approve the audited Financial Statements and the Directors’ Statement for a particular financial year before these statements are presented to the Shareholders of the company.

The directors’ resolution can be passed at a directors’ board meeting, in which case the directors must set up a meeting to approve. Alternatively, the directors’ resolution can be passed by way of a written resolution.

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 Board Minutes to Approve Financial Statements. Alternatively, the board resolution can be passed by way of a written resolution using a Board Resolution to Approve Financial Statements.

Who Approves the Company’s Financial Statements?

The Company’s Financial Statement is approved by the Board of Directors before they are signed by the shareholders. The Financial Statement must be signed by 2 directors, or if a company has only 1 director then he/she can sign the statement on the same day of the audit. Once the directors have signed those documents then shareholders can approve and ratify the documents.

What is the relationship between Shareholders and Directors?

Shareholders are considered part owners of the company, but the responsibility of day-to-day operation is given to directors. So, in most companies, directors and shareholders work closely discussing strategies, making long-term plans, and implementing those plans in a transparent manner.


Once the Financial Statements are ready, it needs to be approved. It is the Directors’ responsibility to sign and approve them. Once everything is completed, the director will sign the Company’s Financial Statements and then submit them to Shareholders to approve.

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