What you need to know about
A Board Resolution is an official written statement issued by a corporate board of directors explaining major corporate decisions.
- A board of directors makes a decision that changes the structure, operations, or management of a corporation.
- Notifies company employees and shareholders about an impending change.
A corporate board of directors is responsible for making major decisions on behalf of the company. The board’s specific duties are determined by the terms of the company’s formative documents (typically, Articles of Incorporation and by-laws) as well as by state law. Boards of directors are typically not involved in day-to-day operations, which are typically left up to corporate officers. However, in all U.S. jurisdictions the board of directors is the highest authority when it comes to corporate management.
Each director on the board has a fiduciary duty to act in a manner that protects the interests of the companies and its shareholders. Sometimes, this requires a major change in company policy, such as the removal or appointment of a new executive or a change in dividends provided to shareholders. At each board meeting, directors consider whether any major decisions must be made in order to ensure the company continues to operate in the best interest of its shareholders. If the directors agree that a change is necessary, they will pass a Board Resolution detailing the decision. If the Board Resolution receives the requisite number of votes, it is noted in the meeting minutes and becomes binding upon the company. Resolutions can address a wide range of issues relevant to the operations and structure of the company from changing the dividends provided to shareholders to naming which officers are authorized to make daily operational decisions for the company. Because board resolutions are some of the most powerful instruments in corporate governance, all corporations should have a solid structure and policy regarding how and when these documents should be issued.
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The directors of ________________, a(n) ____________ corporation (the “Board”), consented to and adopted the following resolutions, approved at a meeting duly held and convened on ____________________, 20___ at _______________:
Resolution of the Board
Now, Therefore, Be it Resolved, that
Certificate of the Secretary
The undersigned certifies that such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof, and are now in full force and effect.
Board Resolution Checklist
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___Review Carefully. Look over the document carefully to ensure it matches your intentions.
___Sign the Document. This document needs to be certified by the Secretary of the Corporation.
___Distribute Copies. Fully executed copy of this document should be maintained in the Corporation Record Book.
Disclaimer: It is strongly advised to have your document reviewed or advised on by an attorney. Corporation documents need to be modified to comply with state law. Companies need to insure compliance with required rules of governance. To speak with a lawyer about this document or any other legal need, please visit LawTrades.com.