What is a Corporate Resolution?

A Corporate Resolution is a written legal document that records binding decisions made by a corporation's board of directors. It's often kept with the corporate minutes that document what happened during a directors' meeting.

Directors can also pass a resolution without holding a meeting. In that case, the document serves as a Consent to Action Without Meeting and replaces a formal board meeting, provided that all directors agree and sign.

Boards use corporate resolutions to record significant decisions, such as granting signing authority, appointing an officer, or approving a bank loan. In legal terms, a corporate resolution formally documents an action taken by a corporation's board, making it a key component of corporate recordkeeping.

A Corporate Resolution is also known as a:

• Board Resolution
• Directors' Resolution
• Resolution of Board of Directors
• Consent to Action Without Meeting
• Corporate Minutes

What are corporate minutes?

Corporate minutes are the written record of what happens at a directors' or shareholders' meeting. They capture legal, tax, and financial decisions, along with any votes taken to approve or reject those decisions. 

Corporate Resolutions adopted at a meeting are included in, or recorded within, the Corporate Minutes as part of that meeting record. Keeping accurate minutes reduces the risk of future disputes and provides a paper trail if the corporation ever needs to prove that a decision was made.

When is a Corporate Resolution required?

A board of directors can use a Corporate Resolution to record almost any significant corporate decision. Common triggers include:

• Appointing officers or granting signing authority: For example, authorizing a director to open a bank account or sign contracts.
• Approving loans or financial actions: Such as taking on debt, setting salaries, or opening a corporate bank account.
• Declaring dividends: Recording the board's decision to distribute profits to shareholders.
• Buying, selling, or leasing assets: Including real estate, equipment, or shares.
• Amending corporate policies: Updating the rules or Corporate Bylaws that govern how the corporation runs.
• Issuing stock or approving share transfers: Documenting changes to ownership.
• Entering into a Joint Venture Agreement: Recording the board's approval of a business partnership.
• Hiring employees or contractors: Formally approving key human resources decisions.

Beyond documenting decisions, corporate resolutions help protect the corporate veil. When directors keep clear records of formal decisions, they show the corporation is operating as a separate legal entity from its owners. 

This supports the limited liability protection that shields shareholders' personal assets and is part of how corporations maintain their status as separate legal entities under U.S. corporate governance law.

What should a Corporate Resolution include?

A well-drafted Corporate Resolution helps provide banks, regulators, and other third parties with the information they need to verify a decision. The table below outlines some key components.

Types of Corporate Resolutions

Not every resolution serves the same purpose. Understanding the different types helps you match the format to the decision you're recording.

Board resolutions vs. shareholder resolutions

Board resolutions record decisions made by the directors, such as appointing officers or approving contracts. Shareholder resolutions record decisions made by the owners, such as electing directors or approving mergers.

Ordinary vs. special resolutions

Ordinary resolutions cover routine business decisions and typically pass with a simple majority. Special resolutions cover major changes, such as amending bylaws or approving a merger, and often require a higher voting threshold under state law.

Common examples of ordinary resolutions include:

• Banking resolutions: Authorize opening a bank account and grant signing authority to specific officers.
• Contract approval resolutions: Approve entering into a specific agreement, such as a lease or vendor contract.
• Officer appointments: Name a new officer, such as a president or treasurer.

Common examples of special resolutions include:

• Bylaw amendments: Change the rules that govern how the corporation operates.
• Merger or acquisition approvals: Authorize the combination with or acquisition of another company.
• Dissolution resolutions: Approve winding down and closing the corporation.

How do I write a Corporate Resolution?

You can create a customized Corporate Resolution by filling out LawDepot's questionnaire. The steps below follow the template's flow.

Step 1: Decide if directors will hold a meeting

Start by deciding whether the board will meet to discuss and approve the resolution. Directors can meet in person, join by an approved form of media, or skip the meeting entirely and use a Consent to Action Without Meeting. If there's no meeting, every director must sign the resolution for it to pass.

Step 2: State where the company is incorporated

Each state has its own rules for how corporations operate, including quorum, voting, and signing requirements. Naming the state of incorporation identifies which corporate law applies, helping ensure the resolution is recorded under the correct jurisdiction.

Step 3: Company information

Note whether the company is a for-profit corporation or a non-profit organization. This affects the language and structure of the resolution.

Include the full legal name of the company and the full name of each director. If a meeting is held, also note which directors are present and which are absent.

Step 4: Add meeting details (if applicable)

If the resolution is passed at a meeting, include:

• Date and location: Where and when the meeting takes place.
• Chairperson: The person running the meeting.
• Secretary: The person recording the meeting.
• Adoption of prior minutes: Note whether the minutes from the last meeting are "adopted as read" or "adopted after discussion and with amendments."

Step 5: Outline the resolutions

Describe each resolution the board is passing and who it affects. Common resolutions include:

• General signing authority: Allows an officer to manage bank accounts and sign documents needed for day-to-day business.
• Banking signing authority: Limits authority to opening and operating a specific bank account.
• Officer appointment: Names a new officer to a role, such as president or treasurer. You may also want to use a Director and Officer Consent Form to record the appointee's acceptance.
• Loan authorization: Approves borrowing money on behalf of the corporation.
• Dividend declaration: Approves a distribution of profits to shareholders.
• Contract approval: Grants authority to enter a specific contract.
• Asset transactions: Approves buying or selling a corporate asset.

Step 6: Decide whether to certify the resolution

A certified Corporate Resolution is verified as accurate by the corporation's president and secretary. Certification is often required by banks or other outside organizations that need proof of signing authority or another specific power. If certification is needed, both the president and secretary must sign the document.

Step 7: Sign the document

Once the resolution is complete, have the appropriate parties sign:

• Resolution passed at a meeting: Either the secretary or the chairperson must sign.
• Consent to Action Without Meeting: Every director must sign.
• Certified resolution: The president and secretary must also sign.

Corporate Resolutions generally don't need to be notarized. Usually, only the required signatures are needed to make the document valid. However, a company’s bylaws or other internal documents may require notarization for certain actions.

Corporate Resolution FAQs