Many are not familiar on what is a Corporate Resolution and when is the proper time to use it. This article will talk about the necessary things about Corporate Resolution, from its uses and how to properly use it for the company.
What is a Corporate Resolution?
A Corporate Resolution is a written statement made by the board of directors of a corporation. The statement include the details of a report authorizing the officers to represent the organization.
The Corporate Resolution is in the minutes of the meeting. It is a record of any major decision made by the shareholders during a meeting. Typically, the board of directors usually decide on what path the company should take, and the Corporate Resolution will act as the documentation.
Where to use Corporate Resolution?
The Corporate Resolution covers various actions. The board writes a Corporate Resolution if there is a newly elected member of the board. However, they also create it when the firm wants to hire new employees, buy patents, sell shares of the corporation, or any the other major decisions.
A Corporate Resolution holds an important role in a corporation. It serves as documentation that is significant and is a concrete record of the decisions the board has made.
Usually, Corporate Resolutions are not needed to be seen by anyone or even submitted in any government agency. It should be kept and treated as a legal binding decision between the shareholders.
Why are Corporate Resolution needed?
Corporate Resolution is a requirement for amendments that the corporation’s existing terms of reference, regulations, or to give advice to the management to specific matters regarding any business operations.
It is also used to approve significant transactions or union that involves the corporation to purchase new equipment or facilities that the company requires. It might also be a requirement for approvals of a sale of business assets, issuance of new stocks or alteration of ownership in the corporation’s structure.
The corporate resolutions hold great power in various companies like Google or MoneyBanker. The board acknowledges it before taking a final decision on the resolution. It also allows the company to answer queries and establish support to come up with a decision.
How to make a Corporate Resolution?
- At the top part of the page, state the ruling body and the legal name of the corporation creating the business decision. Mostly, it is written as “Corporate decision by the Board of Directors of 123 Corporation.”
- After, include other legal identification of the corporation like “123 Corporation was incorporated in the City of X on February 14, 2001.”
- Also, include the location, date, time and the attendance where the board meeting is taking place. Adding the list of the attending members of the board and other present individuals is optional.
- List any resolutions involved like “RESOLVED: That the Corporation will open a new checking account at Mini Bank.” Every detail of every decision must represent as a different resolution. Adding results of voting or other details of discussed matter is also optional.
- End the document with legal confirmation of the truth of the information stated and reviewed. Also, with the dated signatures of the Chairman, Vice Chairman, Secretary, and the Treasurer.
Note: Since corporate resolutions are likely similar in every state, always have a corporate lawyer to review the templates and any necessary corporate resolutions before including them to the company records.
Corporate Resolutions hold a significant role in a corporation’s decision-making, keep in mind to always have it checked before including it in the company’s record. They are documents that affect every decision that the board makes.