Now that we have your company set up and we've got your agreements in place, the next step you will often encounter is what are called “Corporate Resolutions.” They sound more formal and intimidating than they actually are. They are normally no more than a page, often just a sentence or a paragraph.
Common Resolutions
After you start your company, you may need a variety of these resolutions. Some common resolutions include
- Issuing stock certificates - a resolution saying that “John gets five certificates, Steve gets three certificates, Julie gets five certificates and Jennifer gets eight certificates.”
- To set up an initial board of directors - often the members need to be formally appointed through a document
- Setting up your bank account - your bank may require that you provide them with a Corporate Resolution, signed by the owners of the company authorizing that the bank is chosen as the bank for the company.
- Who is authorized to sign documents on behalf of the company?
As you can see, the general idea is that a corporate resolution is usually needed for the major business of the company. If you're going to enter into a merger with another company if you're going to buy another company. If you're going to agree to a large loan or another bank relationship. These are the types of things that will normally require a corporate resolution.
The next question you're probably asking is what exactly are the corporate resolutions? It's a pretty basic document, it's signed and endorsed by the board of directors or the owners of the company. The original is often given to the people who need it and a copy is held by the company in their corporate binder. It's also a good idea whenever you do a corporate resolution to have a copy given to your attorney. There may come a time when you need help from an attorney and you want to make sure that that attorney has access to your corporate resolutions.
Next Steps
If you're ready to get your corporate resolutions prepared, let's set up a Legal Strategy Session to discuss the best options for you. Or, if you'd prefer more information, you can download the Business Lifecycle report for more information.
