A Corporate Resolution: What it is

A corporate resolution is a written compliance document that larger companies would use to record corporate actions. This deals with decisions that are specially made during corporate meetings. The larger companies are usually multi-layered and have a board of directors and/or shareholders. It is therefore necessary for the recording of major decisions.

The board members or the shareholders are an important component of creating a corporate resolution. Thus, the corporate resolution would include a number of actions the board or shareholders take. The company would write the resolution to itemize these actions. The actions might include, for example, the following aspects:

• Adding a new member to the board. This is especially true when a final vote takes place to make changes to the board.
• When they want to sell shares, in particular when shareholders make the decision. The corporate resolution will contain the shares the shareholders wish to issue. 
• They would also include the buyback of shares. 
• When the company wants to sell or lease any of its property,

The making of any big decisions that would affect the business. These include aspects such as:

• Major financial decisions
• Appointment of new executive employees
• Disagreements and conflicts in the corporation
• The development of a new trademark or corporate logo or
• when the company needs to make a loan
• If the company wishes to extend the business,

It is important to record the sale or purchase of patents as well.

The decisions also include the decision to make donations to charity.

The corporate resolution would record most decisions the board or shareholders make. It is a physical, documented record of these decisions. The corporate resolution is a legally binding document, and it is, therefore, important to choose the right corporate resolution template for the state you live in.

A corporate resolution is a legal document but does not need to be notarized. However, it should be stored safely with all other legal documents, such as the minutes. It should have physical as well as digital copies with backups as well.

What should be Included in a Corporate Resolution?

It is important for companies to create a well-written corporate resolution. The resolution will ensure that a company’s board of directors, or shareholders, has a guide, or a framework, for their actions. 

1. The Corporate Resolution Document

The corporate resolution document should include the following:

• There should be a date, the time, the location, and the number of the resolution at the top of the document.
• It should have a clear and concise title.
• The company name should be included. This, in itself, makes it a legal document.
• Include a legal statement that indicates where and when the company was incorporated, especially in light of the particular state where the company existed. It will indicate that the company is legal in that state.
• All resolutions made by the board should be listed. It should include the issue discussed and the resolution.

The following individuals should sign and date the document:

• The chairperson of the board
• The board's vice-chairperson
• The company secretary
• The company treasurer

Below is a corporate resolution sample that clearly shows some of the elements above. The corporate resolution example shows specifically that it is for authorizing an enterprise project.

 
Contents of the Corporate Resolution

In light of the elements above, there are a few additional elements to mention here. As the corporate resolution example shows, it is also important to note that the corporate resolution has to have a title. It has to identify its purpose. It has to have a phrase that reveals the agreement and consent of all the board members or stakeholders. If there is no agreement, a list of the yes (yea) and no (nay) votes has to be added.

Even though the “whereas” statements are not crucial to the corporate resolution, it is best to include them. These are the intentions of the board for creating a resolution. As seen in the example, the resolution also needs to include states of resolve.

The Creation of a Corporate Resolution

The creation of a corporate resolution:

• It starts when the agenda for the meeting is drawn up. It is sent to all the board members for approval and finalization.
• The agenda items usually include the issues that need to be resolved.
• The agenda items will be discussed and the solutions proposed at the meetings.
• The votes of the board members would be recorded and included in the resolution.
• The decisions – approved or unapproved – will also be included in the minutes of the meeting. 

Easy Tips to Create a Corporate Resolution

One of the first suggestions would be to make use of a corporate resolution template.

You should know or decide, whether the resolution would be for internal or external purposes.

Make sure that the corporate resolution has a descriptive title to clearly state what the content of the discussion will be.

It is critical to consult with the board or shareholders when developing a corporate resolution.

It is also important to keep a non-disclosure agreement in mind when writing the corporate resolution.

You need to decide which type of corporate resolution you need. The three types of corporate resolutions are:

• Ordinary corporate resolutions are used for normal or routine changes in a corporate business. 
• Special corporate resolutions include decisions regarding the constitution of a company. Board members or shareholders would have to make these decisions.
• Unanimous corporate resolutions are forms created specifically for voting by a board to make certain decisions.

Even though you might use a corporate resolution template, you need to collect information such as:

• The brief
• Your consultations with the board
• Other resources to help you compile the corporate resolution.

It is critical to understand that the corporate resolution should always be written in formal business language.

You should also make sure that the corporate resolution captures all the information concisely. That is why the corporate resolution template can help a great deal.