A corporate resolution form is essential to a company’s internal documentation.
With its help, a board of directors keeps a legal record of major decisions, defines the board’s actions, follows legal state requirements, and creates a paper trail for new board members to stay abreast of past decisions.
What’s a corporate resolution? How to write a corporate resolution for a board meeting? What to write in a corporate resolution? And when writing a corporate resolution is required? Read this short guide to get answers and learn everything about corporate resolutions.
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Visit WebsiteWhat is a corporate resolution?
A corporate resolution is a formal document that details corporate actions taken during a board meeting.
It includes information about important decisions made by the board of directors and indicates the responsibilities of certain board members or shareholders (like the authority to open a bank account or sign contracts).
The initial purpose of a corporate resolution is to demonstrate to the licensing board and state and federal regulators that the corporation meets its legal requirements. Another objective is to hold the board of directors accountable for its decisions should legal issues arise.
In short, any decision the board of directors makes should be reflected in the corporate resolution.
A corporate resolution form is a legally binding document included in the company’s meeting minutes that is voted on during a board meeting — either offline or by board vote by email.
| Note: There are two types of corporate resolutions — for internal records and for external usage. Internal corporate resolutions aim to document major board decisions and the company’s day-to-day activities. On the other hand, external corporate resolutions are usually required by banks or other outside entities for certain business transactions. |
When is a corporate resolution required?
Since a corporate resolution acts as a written legal record of major decisions made by the board of directors, situations when you might need a corporate resolution include the following:
- Opening a new business account
- Launching a new business location
- Registering a patent or a new trademark
- Taking out a loan
- Entering a joint venture
- Hiring new C-level employees
- Noting changes in the corporate bylaws
- Voting and formally accepting corporate bylaws and articles of incorporation
- Changing the company’s legal name
- Purchasing real estate
- Voting for a new board member
- Voting on new compensation for the CEO or other executive
- Voting for officers to act on behalf of the company
Who should write a corporate resolution?
In short, the board of directors creates a corporate resolution. However, a corporate secretary is obligated to write a corporate resolution.
What’s included in a corporate resolution?
The “filling” of a corporate resolution depends on local state requirements. However, the information presented in the corporate resolution consists of the following:
- Legal company identification
- Company name
- List of board members present at the meeting
- Date, time, and location of a board meeting
- Text of the resolution itself
- Voting quorum
- Information on whether the resolution is voted by unanimous consent (if not, provide a list of all board members and their “yes”/”no” votes)
- Dated signatures of relevant board members
If you’re unsure what to include in your company’s corporate resolution, opt for the board resolution template that most modern board management software products offer.
How to write a corporate resolution in 6 steps
The way you prepare and write a corporate resolution document greatly influences the smoothness of the board meeting.
| Tip: Take on the legal services of a law firm when preparing a corporate resolution to make sure it is written to meet state and federal requirements. |
Learn how to write a corporate resolution form by following these six simple steps.
1. Indicate the company’s name
Write your company’s name and the governing body making the resolution at the top of the document. It might look like this:
| “Corporate Resolution by the board of directors of ABC Company, Inc.” |
2. Add further legal identification
To create a legally binding document, include your company’s legal identification number. It’s also crucial to indicate the state where the board of directors meeting takes place. For example:
| “ABC Company was incorporated in the state of X on September 23, 2014.” |
3. State location, data, and time
Include the board meeting’s location, date, and time — they are important for legal purposes.
4. Include voting quorum
Without a voting quorum (the number of votes needed for a valid session), a board meeting is not recognized, and corporate resolutions voted on during the meeting won’t be considered binding. Sometimes, the full list of board members’ names is also required.
5. Provide the list of corporate resolutions
All decisions made and voted on during the board meeting should be listed in this section. It looks something like this:
| “RESOLVED: That the corporation will open a new bank account at JPMorgan Chase” |
| “RESOLVED: That the company will hire Jack Smith as a new CTO” |
| “RESOLVED: That the corporation will open a new business location in Chicago, Illinois” |
However, it’s recommended to add more details on each separate resolution. It will typically include a description of the discussion, debates, possible arguments, and voting results.
6. Sign and date the document
A corporate resolution is a legally binding document only when signed and dated by:
- Corporate secretary
- Corporate treasurer
- Board chairperson
- Vice chairman
Creating corporate resolutions with board management software
Board management products are often called board portals, or simply boardrooms, and are designed to make corporate governance easier and more effective.
With the help of virtual board meeting software, you can easily create a corporate resolution letter and enable an online discussion, board voting, and approval. This significantly improves the internal business processes and facilitates board of directors decision-making.
To try an effective paperless board meeting, choose a reliable boardroom provider like iDeals, which is a TOP-1 choice of our experts.
By implementing the iDeals board management software into your business, you’ll have an easier time finding how to write a notice to a corporate resolution because iDeals automates this process. Additionally, you can create a template for your company to use for future resolutions.
Key takeaways
Corporate resolution is a legally binding document that specifies all the major board of director decisions.
Board resolutions are required when a company is opening a new business entity, hiring C-level executives, entering a new joining venture, voting for a new board member, and many other situations.
A proper corporate resolution indicates the company’s name, its legal identification, the meeting’s date, time, and location, the voting quorum, the list of resolutions, and relevant signatures.
The whole process of creating a corporate resolution is significantly simplified when using board management software.
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Visit WebsiteFAQ
What is a corporate resolution for a nonprofit?
A corporate resolution for a nonprofit organization doesn’t differ much from a resolution for a for-profit corporation. You need to document the specifics of the resolution, including the board meeting’s date, time, location, and the list of board members.
Who signs a corporate resolution?
Like all legal documents, corporate resolutions must be signed by all board members to be legally binding. The must signatures should be provided by a corporate secretary, corporate treasurer, board chairmen, and vice chairperson.
What does a corporate resolution look like?
A corporate resolution looks like a legal document where the name of the organization, its legal identification, location, date, time, voting quorum, list of resolutions, and signatures of responsible board members are provided.