What is a Corporate Resolution?

A corporate resolution is a formal document drafted by a corporation’s board of directors, set to authorize specific decisions or decisions on behalf of the company. It is an official record of decisions made during board or shareholder meetings. 

This document also ensures that business activities align with the company’s bylaws and legal requirements. Resolutions may address routine matters, including appointing officers, or significant decisions like mergers, acquisitions, or securing financing. 

What are the examples of corporate resolutions?

Corporate resolution can address a range of business activities, and some common examples include:

• Approval of Financial Transactions: Authorizing loans, opening bank accounts, or securing lines of credit.
• Appointment of Officers (or Directors): Assigning new roles or electing board members.
• Issuance of Shares: Approving the distribution of company shares and other securities.
• Adoption of Policies: Enacting company policies on matters like compliance, ethics, or employee benefits. 
• Mergers and Acquisitions: Endorsing a company’s involvement in mergers, acquisitions, or joint ventures.
• Amendment of Bylaws: Making changes to the organization’s foundational governance documents. 
• Approval of Dividends: Declaring and distributing profits to shareholders.

When is a corporate resolution required?

A corporate resolution is typically required when the company must formally document and authorize critical actions — particularly those impacting its legal, financial, or operational framework. A few examples are:

• Major financial decisions such as acquiring assets
• Governance changes like electing or removing board members
• Documenting actions to fulfill government or industry regulations
• Investor relations such as approving share issuance or stock splits
• Litigation matters like authorizing legal actions or settlements involving the corporation

How to Write a Corporate Resolution

To draft a clear and legal corporate resolution, it is crucial to include these elements:

1. Title: Begin with a clear, descriptive title, such as “Resolution to Approve Bank Account Opening” or “Resolution to Appoint New Board Member”
2. Date and Meeting Information: Specify the date, time, and location of the meeting during which the resolution was adopted. 
3. Introduction: Give context by stating the authority under which the resolution is being proposed (e.g. bylaws, governing laws).
4. Resolution Statement: Write the main resolution in clear, formal language. For instance, “Be it resolved that the board authorizes the CEO to sign a lease agreement for office space at [address].”
5. Supporting Details: Include specifics like financial figures, terms, or conditions.
6. Approval and Signatures: — Document the decision’s approval by noting the quorum and voting results, and also include signatures of authorized officers (e.g. chairperson) to validate the resolution.
7. Distribution: Make sure copies are distributed to relevant stakeholders, such as board members, legal counsel, or financial institutions.