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Corporate Resolution

Corporate Resolution Template

If you need to put major company decisions in writing then use a corporate resolution.

A company’s board of directors uses a corporate resolution to put decisions in writing. It shows that the business had the authority to make a specific choice or action.

It creates a record of major decisions by the shareholders or the board of directors.

Every business needs to make important decisions, and a free corporate resolution template can help you make those decisions correctly. Legal Templates can help you create a corporate resolution that fits your company.

Table of Contents

What is a Corporate Resolution?

A corporate resolution is an official document adopted by a corporation's board of directors or shareholders that records a formal decision or action taken by the corporation. These resolutions serve as a key component of a corporation's governance and record-keeping practices. Corporate resolutions are typically used to authorize significant actions, make policy decisions, or provide a record of the corporation's intent on various matters. Here are some common types of corporate resolutions:

  1. Board of Directors Resolutions: These resolutions are adopted by the board of directors to make decisions and take actions on behalf of the corporation. Examples include appointing officers, approving financial statements, authorizing contracts, and declaring dividends.
  1. Shareholder Resolutions: Shareholders may pass resolutions during annual or special meetings to make important decisions, such as electing directors, amending bylaws, approving mergers or acquisitions, or ratifying certain actions taken by the board.
  1. Committee Resolutions: Resolutions can be adopted by committees formed within the corporation, such as audit committees or compensation committees, to address specific matters within their areas of responsibility.
  1. Unanimous Written Resolutions: In some cases, corporate resolutions can be passed without holding a formal meeting. Instead, directors or shareholders can sign unanimous written resolutions to document their agreement on a particular issue.

Corporate resolutions typically include the following elements:

  • Title: Identify the resolution with a descriptive title that reflects its purpose.
  • Date: Specify the date when the resolution was adopted.
  • Recitals or Considerations: Provide a brief explanation of the background or context leading to the resolution. This section may outline the reasons or justifications for the decision.
  • Operative Clause: State the actual decision, action, or authorization being taken. This is the core of the resolution.
  • Signatures: Include the signatures of those who adopted the resolution. In some cases, corporate resolutions may require specific signatories, such as the chairperson of the board or the corporate secretary.
  • Corporate Seal (Optional): Some corporations choose to affix their official corporate seal to the resolution, though this practice is less common today.

Corporate resolutions are essential for legal and regulatory compliance, as they provide evidence that decisions and actions taken by the corporation were duly authorized by its governing bodies. Additionally, they serve as a historical record of the corporation's activities and decision-making processes.

It's important to follow corporate bylaws and applicable laws and regulations when adopting resolutions. Consulting with legal professionals or corporate governance experts can help ensure that resolutions are drafted, adopted, and recorded correctly.

When to Use a Corporate Resolution?

Corporate resolutions should be used whenever a corporation needs to make significant decisions or take specific actions that require formal authorization or documentation by its governing bodies, such as the board of directors or shareholders. These resolutions serve as a formal record of corporate decisions and actions, ensuring transparency, accountability, and legal compliance. Here are common situations in which corporate resolutions are used:

  1. Appointing or Removing Officers and Directors: A corporate resolution is typically used to appoint individuals to positions such as CEO, CFO, president, or members of the board of directors. Likewise, it's used when removing officers or directors.
  1. Authorization of Contracts: Resolutions are required to authorize the corporation to enter into contracts, agreements, or transactions, especially when these involve significant financial commitments or long-term obligations.
  1. Declaration of Dividends: Before distributing dividends to shareholders, a corporate resolution is needed to declare the dividend, specifying the amount and payment date.
  1. Borrowing and Financing: When the corporation seeks loans, lines of credit, or financing, a resolution is adopted to authorize the borrowing, specifying the terms and conditions.
  1. Stock Issuance or Repurchase: Resolutions are used to authorize the issuance of new shares of stock or the repurchase of existing shares.
  1. Mergers and Acquisitions: In mergers, acquisitions, or major corporate transactions, resolutions are required to approve the deal and related agreements.
  1. Amendment of Bylaws: If the corporation wishes to amend its bylaws, a resolution is necessary to propose, discuss, and vote on the changes.
  1. Adoption of Corporate Policies: Resolutions can be used to adopt or amend corporate policies and guidelines on various matters, including ethics, cybersecurity, and employee benefits.
  1. Authorization of Investments: When making significant investments or acquisitions of assets, a corporate resolution is used to approve the transaction.
  1. Approval of Financial Statements: Resolutions are adopted to approve annual financial statements, budgets, and financial reports.
  1. Opening Bank Accounts: Corporations often adopt resolutions to authorize the opening of bank accounts or designate signatories for these accounts.
  1. Dissolution or Liquidation: In the event of dissolution or liquidation, a resolution is used to approve the dissolution and appoint a liquidator.
  1. Adoption of Stock Option Plans: When implementing stock option or equity incentive plans for employees, a resolution is required for approval.
  1. Legal Action: Resolutions may be needed to authorize the corporation to initiate or settle legal actions, such as lawsuits or arbitration proceedings.
  1. Annual Meetings: Resolutions may be adopted at annual shareholder meetings to elect directors, appoint auditors, and approve other annual matters.
  1. Real Estate Transactions: For the purchase, sale, lease, or mortgage of real estate, resolutions are used to authorize these transactions.
  1. Changes in Capital Structure: Resolutions are used to approve changes in the corporation's capital structure, such as stock splits or reverse stock splits.

It's important to follow corporate bylaws, state or federal laws, and any specific requirements outlined in the corporation's articles of incorporation when using corporate resolutions. Additionally, the adoption and documentation of resolutions should adhere to the rules and procedures outlined in the corporation's governing documents and relevant legal and regulatory requirements. Legal professionals or corporate governance experts can provide guidance on the appropriate use and drafting of corporate resolutions.

What to Include in a Corporate Resolution Form

A corporate resolution form is a standardized document used to record decisions and actions taken by a corporation's governing bodies, such as the board of directors or shareholders. While the specific content of a corporate resolution form may vary based on the nature of the decision or action, here are the key elements that should typically be included:

  1. Title: Clearly state that the document is a "Corporate Resolution."
  1. Date: Specify the date on which the resolution is being adopted.
  1. Type of Meeting: Indicate whether the resolution is being adopted at a meeting of the board of directors, shareholders, or a committee.
  1. Recitals or Considerations: Provide a brief introduction that outlines the background or context for the resolution. Explain the reasons or justifications for the decision.
  1. Operative Clause: This is the core of the resolution and should contain the following information:
    • Description of the Decision or Action: Clearly state what decision or action is being taken. For example, "To appoint John Doe as Chief Financial Officer."
    • Authorization: Specify that the decision is authorized and approved by the governing body. For example, "Be it resolved that the Board of Directors of [Company Name] hereby authorizes and approves..."
    • Conditions or Terms: Include any conditions, terms, or limitations associated with the decision or action.
  1. Voting Results: If the resolution is related to a vote, include the details of the vote, including the number of votes in favor, against, and any abstentions.
  1. Signatures: Provide space for the signatures of the individuals who adopt the resolution. This typically includes the chairperson of the meeting and the corporate secretary or another designated individual responsible for recording minutes and resolutions.
  1. Corporate Seal (Optional): Some corporations choose to affix their official corporate seal to the resolution.
  1. Witness Signatures (if required): In some jurisdictions or for specific types of resolutions, witness signatures may be required.
  1. Attachments (if applicable): If there are supporting documents or exhibits related to the resolution (e.g., contracts, financial reports), reference them in the resolution and consider attaching them as appendices.
  1. Distribution: After adoption, distribute copies of the resolution to relevant parties, such as directors, shareholders, or committee members.
  1. Filing and Record-Keeping: Retain a copy of the resolution in the corporation's records as part of its official corporate documents.

It's important to use consistent formatting and language in corporate resolution forms to ensure clarity and compliance with corporate bylaws and legal requirements. Additionally, specific details may vary based on the corporate structure, the nature of the resolution, and applicable state or federal laws.

Consulting with legal professionals or corporate governance experts can help ensure that your corporate resolution forms are drafted correctly and meet all relevant legal and regulatory requirements.

How to Write a Corporate Resolution

Writing a corporate resolution involves carefully documenting a formal decision or action taken by a corporation's governing bodies, such as the board of directors or shareholders. Here's a step-by-step guide on how to write a corporate resolution:

1. Title and Introduction:

  • Begin the resolution with a clear title, such as "Corporate Resolution of [Company Name]."
  • Provide a brief introduction that outlines the context or background for the resolution, including the date of the meeting.

2. Identify the Governing Body:

  • Clearly specify which governing body is adopting the resolution (e.g., "The Board of Directors of [Company Name]"). If the resolution is being adopted by shareholders or a committee, replace "Board of Directors" with the appropriate entity.

3. Recitals or Considerations:

  • Provide a series of recitals or considerations that explain the reasons, justifications, or background for the decision. This section sets the stage for the resolution.
  • For example, "WHEREAS, it has been determined by the Board of Directors that [explain the background or reason for the decision]."

4. Operative Clause:

  • This is the core of the resolution and should contain the following elements:
    • Description of the Decision or Action: Clearly and concisely state the decision or action being taken. For example, "RESOLVED, that John Doe is hereby appointed as the Chief Financial Officer of [Company Name]."
    • Authorization: Explicitly state that the governing body authorizes and approves the decision or action. Use language like "BE IT RESOLVED" to signify the resolution.
    • Conditions or Terms: If there are any conditions, terms, or limitations associated with the decision or action, include them in this section.

5. Voting Results (if applicable):

  • If the resolution is related to a vote, include a section that details the results of the vote, including the number of votes in favor, against, and any abstentions.

6. Signatures:

  • Provide space for the signatures of the individuals who are adopting the resolution. Typically, this includes the chairperson of the meeting and the corporate secretary or another designated individual responsible for recording minutes and resolutions.
  • Use a signature block format that includes names, titles, and the date of signature.

7. Corporate Seal (Optional):

  • Some corporations choose to affix their official corporate seal to the resolution, especially for important or formal decisions.

8. Witness Signatures (if required):

  • In some jurisdictions or for specific types of resolutions, witness signatures may be required. Ensure compliance with legal requirements.

9. Attachments (if applicable):

  • If there are supporting documents or exhibits related to the resolution (e.g., contracts, financial reports), reference them in the resolution and consider attaching them as appendices.

10. Distribution and Filing:

  • After the resolution is adopted, distribute copies to relevant parties, such as directors, shareholders, or committee members.
  • Retain a copy of the resolution in the corporation's records as part of its official corporate documents.

11. Review and Compliance:

  • Before finalizing the resolution, review it for accuracy, clarity, and compliance with corporate bylaws and legal requirements. Seek legal counsel if needed.

12. Notarization (if required):

  • Depending on jurisdiction and specific requirements, certain resolutions may need to be notarized or verified by a notary public.

Remember to maintain consistency in formatting, language, and terminology across all corporate resolutions to ensure clarity and compliance. Legal professionals or corporate governance experts can provide guidance on drafting and adopting corporate resolutions effectively.

Corporate Resolution Terms

Corporate resolutions often contain specific terms and phrases commonly used in the context of corporate governance and decision-making. Understanding these terms is important for drafting and interpreting resolutions correctly. Here are some key corporate resolution terms:

  1. "BE IT RESOLVED": This phrase is commonly used to introduce the operative clause of a resolution, signaling that a decision or action is being formally proposed and adopted.
  1. "WHEREAS": This term is used to introduce recitals or considerations that provide the background and context for the resolution. For example, "WHEREAS, the Board of Directors has considered..."
  1. "RESOLVED": This term signifies the specific action or decision being taken by the governing body. It is followed by the actual resolution, such as appointing an officer or approving a contract.
  1. "APPOINTMENT": This term is used when the resolution involves appointing individuals to specific positions or roles within the corporation, such as officers or directors.
  1. "AUTHORIZATION": Resolutions often include language stating that the governing body authorizes or approves a particular action, such as entering into a contract or borrowing funds.
  1. "AMENDMENT": This term is used when a resolution proposes changes to the corporation's bylaws, articles of incorporation, or other governing documents.
  1. "RATIFICATION": When a governing body approves or confirms a decision or action that was taken previously but required retroactive approval, it is often referred to as ratification.
  1. "ADOPTION": This term is used when a resolution is proposed and formally accepted by the governing body. For example, "BE IT RESOLVED, that the resolution is adopted."
  1. "QUORUM": The presence of a minimum number of members required for a valid meeting or vote is often mentioned in resolutions. For example, "A quorum being present, the resolution is duly adopted."
  1. "UNANIMOUS WRITTEN CONSENT": This phrase is used when a resolution is adopted without holding a formal meeting, with all members providing written consent to the action or decision.
  1. "CERTIFICATION": Resolutions often include a certification statement, signed by the appropriate officers, verifying the accuracy and authenticity of the resolution.
  1. "EXHIBITS" or "APPENDICES": These terms refer to additional documents or attachments that may be referenced in the resolution, such as contracts, financial reports, or agreements.
  1. "CLOSING DATE": When the resolution relates to financial transactions or legal agreements, it may specify a closing date, which is the date when the transaction is finalized.
  1. "BYLAWS": Resolutions may reference the corporation's bylaws when proposing changes or amendments to these governing documents.
  1. "SHAREHOLDER MEETING" or "DIRECTORS MEETING": When resolutions pertain to decisions made during specific types of meetings, the resolution may reference the meeting type and date.
  1. "CORPORATE SEAL": Some resolutions mention the corporate seal, which may be affixed to the resolution for added formality.
  1. "CERTAIN TERMS AND CONDITIONS": Resolutions may include this phrase when there are specific conditions or terms attached to the decision or action being taken.

These terms are used to provide clarity and structure in corporate resolutions, ensuring that the intentions of the governing body are accurately and formally documented. The precise language and terminology used in resolutions may vary depending on the nature of the resolution and the specific corporate governance practices of the organization.

Frequently Asked Questions

What is a corporate resolution for an LLC?

A corporate resolution for an LLC is a written record of important decisions made by LLC members. Most states do not require a corporate resolution for LLCs.

However, it is advisable to use corporate resolutions anyway to record major decisions of the LLC. This provides the business with all the benefits of using this important document, including keeping a legal record of these decisions.

Does a corporate resolution need to be notarized?

Corporate resolutions do not have to be notarized.

It becomes legally binding because of the parties’ signatures, such as the board members or shareholders.

What is the difference between a board resolution and a shareholder resolution?

A board resolution is a decision or action taken by a corporation's board of directors. It typically addresses matters within the authority of the board, such as appointing officers, approving contracts, or making strategic decisions. A shareholder resolution, on the other hand, is a decision made by the corporation's shareholders during shareholder meetings. Shareholder resolutions often involve electing directors, approving mergers or acquisitions, and amending corporate bylaws. The key difference is that board resolutions are adopted by the board of directors, while shareholder resolutions are adopted by the shareholders.

Can corporate resolutions be adopted without holding a formal meeting?

Yes, corporate resolutions can be adopted without holding a formal meeting through a process known as "unanimous written consent." This means that all members of the governing body (e.g., all directors or all shareholders) provide written consent to a proposed resolution. Unanimous written consent allows decisions to be made efficiently without the need for a physical meeting. However, it's essential to ensure that the consent process complies with legal and corporate governance requirements, including obtaining signatures from all relevant parties and maintaining proper documentation of the consent process and resolution.

Corporate Resolution Sample

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