Corporate resolutions on your radar yet? We’re into November now and the end of the year is firmly on the horizon. Throughout the year, you may have had reasons to use corporate resolutions. Especially as the pandemic changed your business, those major changes often require the shareholders to weigh in. Perhaps you’ve opened your business in 2020 and you don’t know what corporate resolutions are? A corporate resolution is a document used when the company needs to make a decision (usually a large decision). That decision requires an agreement amongst the owners of the company. The way to do that? A corporate resolution. It’s a document that shows anyone reviewing the records of the company that the decision was made. In some instances, the resolutions need to be shown to regulators or licensing boards. They are another one of those legal terms that sound more intimidating than they actually are.
What Are Some Common Corporate Resolutions?
Since they are used for major decisions, corporate resolutions are common, especially when first starting a business:
- Approving officers and board members;
- Setting up a corporate bank account;
- Buying or selling real estate;
- Approving initial bylaws;
- Merging with another business or entering into a joint venture;
- Taking out a loan; and
- Relocating the business.
There can be many other decisions that require a resolution, but these are just a few examples.
What’s In A Corporate Resolution?
The exact form of a resolution is governed by the state the company is governed by (so it’s a good idea to check with a lawyer to make sure you’ve got the right form). In general, the items that should be in a resolution:
- Name of the company and the state where it is incorporated;
- Purpose of the document;
- Date and place of the resolution; and
- Statement of the intentions of the board to enter into the resolution;
- A provision that the company consents and agrees to the resolution; and
- Signatures of the officers signing the resolution.
There may be additional items required by your state. And there is probably an accepted for that is used (so there’s no need to recreate the wheel).
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If you are thinking of starting a business or already started your business and want to make sure your legal documents are in order, give me a call and we can sit down to discuss the process and what documents would be best tailored for your company – (877) AMAYERS.