A corporate resolution officially documents all key business decisions so that they may be kept for the company’s official records. Corporate resolutions may address a broad variety of issues, from defining which officials are allowed to act on the company’s behalf to adjustments in dividend distribution. The primary goal of corporate resolutions is to keep thorough and accurate records of all significant activities. While they are not usually presented to governing or oversight organisations, they are an important aspect of adhering to needed corporate formalities. In the event that your firm is sued, these documents may assist to establish the legality of your company as a distinct legal entity, preserving your limited liability protection.
How to Make a Business Resolution
Corporate resolutions are often drafted during a shareholder or board of directors meeting. When an important subject has to be voted on, it will be brought forward, debated, and voted on. A corporate resolution is a signed record of each matter that has been settled. The resolution and whether or not it was passed will also be included in the meeting minutes.
The Fundamentals
A corporate resolution’s structure and standards may vary somewhat from state to state, but most resolutions will have the same essential parts.
Business Name: Include your company’s name in the title to make it obvious who is requesting the resolution.
Date, time, and location: Include when and where the resolution will be passed.
Include the goal or context of the resolution, followed by a list of measures your firm intends to do. Each action will be stated separately as a resolution.
Signatures: In addition to the signatures and dates of each designated official necessary to sign resolutions, there should be a statement attesting to the resolutions’ approval, normally signed by the company secretary.
Because each state’s format and other requirements may change, have your corporation attorney evaluate the paperwork to verify they comply with your state’s standards.
Corporate Resolution Examples
Corporate resolutions may be used to make decisions on a variety of subjects. They are especially valuable as you traverse the early days of your organisation and make critical choices about regulations, leadership, finances, and other issues. During this stage, some popular resolutions include:
Adoption of bylaws
Choosing directors
Officers are appointed.
Choosing a Corporate Seal
Creating an executive office
Obtaining a variety of government permissions
Meetings of the board of directors
Organizing the annual shareholder meeting
granting your treasurer/administrator/CFO permission to create and utilise business bank accounts
Designating authorised signers and authorising corporate accounts
Creating a legal compliance committee
Authorizing the issue of stock shares
Making a leasing agreement
Allocating loan money
Obtaining a Business Credit Card
Once your company is formed, you will use corporate resolutions to determine and record essential recurring matters such as giving advance notice of meetings, firing directors, modifying bylaws, asking for corporate loans, and spending a significant amount of corporate cash. If you decide to file for bankruptcy or dissolve your business, you will also need to employ a corporate resolution.
A Corporate Resolution Example
NAME OF THE COMPANY
RESOLUTION REGARDING []
WHEREFORE, [Company Name] wishes to…
RESOLVED:
RESOLVED:
RESOLVED:
The undersigned hereby certifies that the preceding is a complete, accurate, and correct copy of [Corporation Name’s] Board of Directors Resolution.
IN WITNESS WHEREOF, I have signed my name as Secretary and have attached the corporate seal of the above-mentioned Corporation this [Day of the Week], [Current Month], and [Current Year].
[Name] [Date], Secretary
Director:
Director:
Director:
Director:
What to Do Once the Resolution Has Been Signed
Following signature, your corporate secretary will submit the resolution with your company’s official records. Your company resolutions may then be referred to whenever necessary. This might happen when approving significant bank transactions or creating new accounts, if an employee or shareholder has to see them in the course of conducting business, if your firm is ever audited by the IRS, or if the corporation or its shareholders face legal action.