A Directors' Resolution documents the decisions made by a corporation's board of directors.
When a board of directors reaches an essential resolution in a board meeting, it must be put in writing and then certified. It's also important to remember that a Directors' Resolution can also be created with written consent.
To grasp what a Directors' Resolution is, it's essential to know the purpose of a board of directors. Essentially, this is a group of directors with a fiduciary duty toward the shareholders of a corporation.
They are retained to guide the corporation, set goals, and ensure everything runs smoothly. This leads to why they need documents to record all the resolutions made. A Directors' Resolution usually contains a decision that's exceedingly important to a corporation.
For example, a board of directors may reach a resolution to enter a long-term lease, open a corporate bank account, appoint new officers, and even authorize loans. All significant decisions require the board to vote and for the resolution to be documented.
Depending on your state, a Directors' Resolution may also be known as:
Boards of Directors' Resolution
Resolution of Board of Directors
Consent to Action Without Meeting
In short, a corporation needs to keep a record of all the resolutions made. An official paper trail is essential for any corporation and shows how the decisions came about in detail. Also, a third-party could request to inspect these resolutions. This could range from a bank, a court, and to the IRS.
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A Directors' Resolution must have all the necessary information to document the decision appropriately made. You'll want to have a template ready for all future resolutions.
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To create your document, please provide:
Corporation details: The legal name of the company, state of formation, complete address, and other relevant information
Date and location: When and where the resolution was made
Resolution: All the specificities of the resolution in question
Statement of resolution's approval: A statement saying all the directors have agreed to the resolution
Names and signatures directors: Printed names of the directors and their signatures
Secretary signature and name: The name of the company's secretary and their signature
Corporation: A company structure recognized by law as a separate entity
Shareholders: People owning shares in a corporation
Board of Directors: A group of people appointed to supervise a corporation and act on behalf of the shareholders
Chairperson: The director who leads the board
Secretary: A person in a senior position with the authority to implement decisions of the board of directors
Agenda: A list of all topics to be discussed in a meeting
Meeting Minutes: The written record of a formal corporate meeting
Fiscal year: Any defined period of 12 months a company uses for financial reporting and budgeting, which does not have to equal the calendar year of January to December
Corporate bylaws: A set of rules adopted by the board of directors of a corporation
Once they reach a resolution within or without a board meeting, it's crucial to go over the written resolution and make sure everything is in order. If mistakes are absent, the directors and the secretary can proceed to sign the document. Notarization is not required.
All Directors' Resolutions should be included in the corresponding Meeting Minutes and stored in the corporation's minute book. A Directors' Resolution does not have to be filed with any governmental bodies.
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