Drafting an Effective Corporate Resolution

06/09/2023

31 min

Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

As a specialist in corporate law, the Genie AI team is often called upon to assist businesses in crafting effective corporate resolutions. This legal document is designed to provide a written record of the decisions made by the board of directors, and it’s important for business owners to understand why these resolutions matter so they can make informed decisions that benefit their organization.

A corporate resolution is an official document used to authorize specific actions taken by the company, and many are required by law before they can be enacted. By providing a written record of the decision-making process and any legal or financial obligations that may arise as a result, this document helps protect the company from any potential risks or liabilities. Additionally, it helps ensure all decisions are being made in accordance with both internal regulations and external laws.

When drafting a corporate resolution, it’s important that all information is accurately represented and formatted correctly. It must also be signed by at least one majority member of the board of directors before it can be put into effect. To craft an effective resolution that meets all legal requirements and protects your business from any potential issues or liabilities, follow our step-by-step guidance below or access our template library today for free templates provided by our community experts.

Definitions

Corporate Resolution: A formal document used by a corporation or business to record decisions made by its board of directors that is legally binding and serves as written evidence of the corporation’s agreement to a particular action.

Resolution Clause: A section of a corporate resolution that outlines the proposed action and the board’s decision.

Resolution of Intent: A type of corporate resolution that states the board’s intention to take a certain action.

Resolution of Authorization: A type of corporate resolution that authorizes a particular action.

Resolution of Election: A type of corporate resolution that is used to elect a new officer to the board of directors.

Resolution of Appointment: A type of corporate resolution that is used to appoint a new officer to the board of directors.

Resolution of Dissolution: A type of corporate resolution that is used to dissolve a corporation.

Resolution of Amendment: A type of corporate resolution that is used to amend a corporation’s charter.

Preamble: A section of a corporate resolution that states the background information and purpose of the resolution.

Resolution Body: A section of a corporate resolution that outlines the proposed action and the board’s decision.

Shareholders: People who own shares of a company.

Creditors: People to whom a company owes money.

Suppliers: People or companies who provide goods or services to a company.

Customers: People or companies who purchase goods or services from a company.

Compliance: Meeting a set of standards or requirements.

Regulatory Requirements: Rules and regulations set by a government or other authority.

Understanding the Purpose and Definition of a Corporate Resolution
Researching the purpose of a corporate resolution
Defining the key elements of a corporate resolution
Determining the Appropriate Resolution Type
Comparing different resolution types
Choosing the most suitable resolution type
Defining the Resolution’s Scope and Objective
Outlining the scope of the resolution
Establishing the specific objective of the resolution
Identifying the Affected Parties and their Interests
Identifying all parties involved
Determining the interests of each party
Drafting the Resolution and its Supporting Documentation
Constructing the resolution in accordance with applicable laws and regulations
Gathering relevant supporting documents
Distributing and Recording the Resolution
Distributing copies of the resolution to the affected parties
Recording the resolution in the official corporate records
Finalizing the Resolution and Executing the Transaction
Readying the corporate resolution for execution
Executing the transaction in accordance with the resolution
Ensuring Compliance with Regulatory Requirements
Verifying applicable laws and regulations
Implementing the necessary measures to ensure compliance
Understanding the Impact of the Corporate Resolution on Business Operations
Assessing the impacts of the resolution on operations
Planning for the implementation of the resolution in the business operations
Tips for Drafting an Effective Corporate Resolution
Researching and understanding applicable laws
Writing clear and concise language
Making sure the resolution is clear and unambiguous
Seeking advice from a legal expert when needed

Get started

Understanding the Purpose and Definition of a Corporate Resolution

Learn the definition of a corporate resolution and understand the purpose it serves
Understand the difference between a corporate resolution and a bylaw, and when each should be used
Identify the corporate resolution’s legal implications and the importance of accuracy in its wording
Research the legal requirements for the corporate resolution in your state or country

When you have a good understanding of the purpose and definition of a corporate resolution and have researched the legal requirements, you can check this off your list and move on to the next step.

Researching the purpose of a corporate resolution

Read up on the purpose of a corporate resolution and why it is important for a business
Explore different scenarios where a corporate resolution may be applicable
Investigate different types of corporate resolutions, such as resolutions for dissolution of a company or to increase a capital fund
Get an understanding of corporate resolutions used in different countries
Research the legal requirements and regulations associated with corporate resolutions
Understand the legal implications of a corporate resolution

When you have a comprehensive understanding of the purpose of a corporate resolution and have researched the different types and legal requirements associated with it, then you can check this off your list and move on to the next step.

Defining the key elements of a corporate resolution

Identify the type of resolution you are drafting, such as a resolution to open a bank account, authorize a loan, or sell property.
Define the entity and its legal structure, such as a corporation, limited liability company, or partnership.
Identify the resolution’s scope, purpose, and duration.
Include all applicable persons, entities, and jurisdictions.
List out the specific actions that the resolution authorizes.
Include any other relevant details.

How you’ll know when you can check this off your list and move on to the next step:

Once you have identified the type of resolution, defined the entity and its legal structure, identified the resolution’s scope, purpose, and duration, included all applicable persons, entities, and jurisdictions, listed out the specific actions that the resolution authorizes, and included any other relevant details, you can move on to the next step of determining the appropriate resolution type.

Determining the Appropriate Resolution Type

Identify the purpose of the corporate resolution, such as establishing a corporate policy, creating a new agreement, or terminating an existing agreement
Research the different types of corporate resolutions available and decide which type best fits the purpose of the resolution
Consider whether a standard form of resolution is available and appropriate, or if a custom resolution must be drafted
Research state laws and company bylaws to ensure the resolution is in compliance with applicable regulations
When you have identified the most appropriate resolution type for the purpose, you can move on to comparing different resolution types.

Comparing different resolution types

Research various resolution types available and compare their purpose, format, and applicable requirements
Take into consideration the type of action being requested and which resolution would be most suitable
Note the differences between the various types of resolutions
Once you have a good understanding of the different resolution types and compared them, you can move onto the next step.

Choosing the most suitable resolution type

Analyze the company’s needs to decide which type of resolution is most applicable
Consider the legal implications of each resolution type before making a decision
Research the relevant regulations to make sure the resolution type meets all necessary requirements
Ask legal counsel for assistance, if needed, to choose the most suitable resolution type
Once you have chosen the resolution type, you can proceed to the next step: defining the resolution’s scope and objective.

Defining the Resolution’s Scope and Objective

Establish the purpose of the resolution, including who it concerns, what it covers and how it will be implemented
Make sure the resolution is related to matters that are within the corporation’s power to decide
Consider the potential consequences of the resolution, such as legal and financial implications
Check that the resolution is consistent with the corporation’s articles of incorporation, bylaws and other existing resolutions
When you are satisfied that the resolution meets the required criteria, you can move on to outlining the scope of the resolution.

Outlining the scope of the resolution

Consider the areas of business that the resolution needs to affect or apply to
Determine who or what will be responsible for implementing the resolution
Outline the boundaries of the resolution in order to ensure it is within the scope of the company’s authority
Make sure the resolution is not in conflict with any existing laws, regulations, or policies
Once the scope of the resolution is outlined, you can move on to the next step of establishing the resolution’s specific objective.

Establishing the specific objective of the resolution

Determine what the resolution is seeking to accomplish, keeping in mind that the resolution must be specific, clear, and unambiguous.
Ensure that the objectives of the resolution are achievable, and that all the necessary steps are taken to ensure they are met.
Make sure that the resolution is not overly broad or vague, as this will lead to confusion and errors.
When the objectives of the resolution have been clearly defined, the resolution is ready to move onto the next step.

Identifying the Affected Parties and their Interests

Determine the interests of any parties who are affected by the resolution
Identify any stakeholders who may have a vested interest in the outcome of the resolution
Identify any potential conflicts of interest or other areas of concern that should be addressed
Consider any potential risks or liabilities that may arise from the resolution
Evaluate the impact that the resolution may have on the company and its stakeholders
Review the company’s policies and procedures to ensure that the resolution does not conflict with any of them

Once you have identified the affected parties and their interests, you can proceed to the next step of identifying all parties involved.

Identifying all parties involved

Identify the parties that are involved in the resolution. This could include members of the board, shareholders, or other stakeholders.
Make sure to note any parties that may have a legal obligation to be included.
Include parties that may have an interest in the resolution, even if they are not parties to the resolution.
Once all parties involved have been identified and listed, you can check this step off your list and move on to the next step.

Determining the interests of each party

Identify the interests of each party related to the resolution
Consider how each party’s interests can be met
Reach a consensus between the parties on the resolution
Once a consensus is reached, you can move on to the next step: drafting the resolution and its supporting documentation.

Drafting the Resolution and its Supporting Documentation

Gather all relevant documents, such as the corporate charter, bylaws, and minutes of the last meeting
Ensure the language is clear and concise and that the resolution reflects the intentions of the parties
Carefully examine the language of the resolution to make sure it conforms to the applicable state and federal laws, rules and regulations
Prepare a cover sheet that contains a summary of the resolution and an explanation of the purpose of the resolution
Include any additional documents that provide greater detail or clarifications of the resolution
Once the resolution has been drafted, reviewed and approved, you can check this step off your list and move on to the next step.

Constructing the resolution in accordance with applicable laws and regulations

Research applicable laws and regulations to ensure that the resolution is in compliance with them
Identify the necessary elements of the resolution in accordance with the applicable laws and regulations
Determine the roles and responsibilities of the parties involved in the resolution
Draft the resolution in accordance with the applicable laws and regulations
Ensure that the resolution is clear, concise, and complete
Once the resolution has been drafted and reviewed to make sure it is in compliance with the applicable laws and regulations, it is ready to be signed and executed
Check off this step and move onto the next step of gathering relevant supporting documents

Gathering relevant supporting documents

Collect any relevant documents or information that will help support the resolution, such as Articles of Incorporation, By-laws, and previous resolutions
Gather any pertinent details such as the date of the meeting, the names of those in attendance, and the item to be resolved
Check to make sure all board members, shareholders, and other relevant parties are aware of the resolution and have been given the opportunity to review it
When all necessary documents have been obtained and reviewed, and all relevant parties have been notified, you can move on to the next step of distributing and recording the resolution.

Distributing and Recording the Resolution

Make copies of the resolution for each board member
Send the copies to each board member for them to sign
Collect the signed copies
File the signed copies of the resolution in the corporate records
Notify the affected parties that the resolution has been passed
When all of the above is completed, the step is finished and you can move on to the next step.

Distributing copies of the resolution to the affected parties

Make sure to have copies of the resolution ready for distribution.
Identify the affected parties that need to receive a copy of the resolution.
Distribute copies of the resolution to the identified parties.
Ensure that the parties have received the resolution and have read and understood the contents of the document.
Once all affected parties have received the resolution, check this off the list and move on to the next step of recording the resolution in the official corporate records.

Recording the resolution in the official corporate records

Ensure that the corporate resolution has been signed by the appropriate individuals
Create a binder containing the corporate resolution and other necessary documents
Maintain the binder in a secure place, such as the corporate office
Make copies of the corporate resolution and other documents and store in a secure location
Create an electronic version of the corporate resolution and other documents
Update the corporate records with the corporate resolution
When all necessary documents have been collected and stored, the step of recording the corporate resolution in the official corporate records is complete.

Finalizing the Resolution and Executing the Transaction

Review the resolution to ensure that it contains all of the necessary information to execute the transaction.
Issue a copy of the resolution to all parties involved in the transaction.
Collect signatures from all parties required to approve the resolution.
Once all signatures have been collected, file the resolution in the appropriate corporate records.
Verify that all parties involved in the transaction have received copies of the resolution and that all signatures are valid.
You will know that you can check this off your list and move on to the next step when all signatures have been collected and the resolution has been filed in the appropriate corporate records.

Readying the corporate resolution for execution

Obtain the necessary copies of the resolution for the board of directors and shareholders
Ensure that all signatories are available and accessible to sign the resolution
Prepare a cover letter to accompany the corporate resolution
Make sure all parties to the resolution understand the terms of the document
Finalize the resolution for execution
Once all necessary steps are completed, you will have readied the corporate resolution for execution.

Executing the transaction in accordance with the resolution

Obtain written approval on the corporate resolution from all shareholders and/or board members.
Ensure all signatures are collected and documented in a manner that complies with company policy and applicable laws.
Make sure all parties have received a copy of the corporate resolution.
File the corporate resolution with the appropriate state or federal agency.
Once signatures are acquired, the corporate resolution is executed and takes effect.

Once all of the above steps have been completed, you can move on to the next step, which is ensuring compliance with regulatory requirements.

Ensuring Compliance with Regulatory Requirements

Research the relevant regulations and laws applicable to the transaction
Draft the resolution to ensure compliance with the applicable laws and regulations
Have a qualified professional review the resolution to ensure compliance
Once you have a resolution that complies with laws and regulations, you can move on to the next step of verifying applicable laws and regulations.

Verifying applicable laws and regulations

Research and review relevant state and federal laws, regulations, and other applicable legal requirements
Consult with a lawyer or legal expert to ensure you have a comprehensive understanding of all applicable laws and regulations
Make sure you have identified all potential compliance obligations, including any reporting and filing requirements
Determine whether any of the existing laws, regulations, or compliance obligations need to be amended to meet the proposed corporate resolution
If necessary, make revisions to the proposed corporate resolution to ensure compliance with all applicable laws and regulations
Once you are confident that all applicable laws and regulations have been identified and incorporated into the corporate resolution, you can move forward with implementing the necessary measures to ensure compliance.

Implementing the necessary measures to ensure compliance

Draft a corporate resolution that outlines the business’s compliance measures and goals
Research applicable laws and regulations to ensure the resolution complies with all applicable local, state, and federal laws
Obtain signatures from all appropriate parties and ensure the resolution is properly documented
Make sure that all executives, shareholders, and other related parties have a copy of the resolution
Once all stakeholders have agreed to the terms of the resolution and have signed it, the resolution is complete and compliance measures are in effect
Check that all compliance measures are working properly and are consistently enforced
Make sure that employees are aware of all compliance measures and that they are being followed
Monitor the implementation of the resolution and make changes as necessary
Once you are confident that all compliance measures are in place and being followed, you can move on to the next step.

Understanding the Impact of the Corporate Resolution on Business Operations

Analyze the resolution to determine how it will affect the company’s operations
Identify any changes to the company’s structure, policies, or procedures that may be required
Analyze the potential financial impacts of the resolution, such as additional costs or changes to revenue
Consider any potential regulatory or legal implications that may result from the resolution
Evaluate the impact of the resolution on the company’s customer base, employees, suppliers, and other stakeholders
Develop a plan to communicate the resolution to the relevant parties

Once you have analyzed the resolution, identified any changes required, and evaluated the potential impacts, you can move on to the next step - Assessing the impacts of the resolution on operations.

Assessing the impacts of the resolution on operations

Review the resolution and determine which areas of the business operations it will affect
Analyze the potential impact and determine how it will affect employees, customers, and other stakeholders
Determine any potential risks associated with the resolution
Identify any areas of the business operations that may need to be adjusted to facilitate the resolution
Develop a plan to monitor and manage any potential risks associated with the resolution

When you can check this off your list:

When you have analyzed the potential impacts and identified any potential risks associated with the resolution.

Planning for the implementation of the resolution in the business operations

Start by assessing how the proposed resolution will affect existing business operations
Identify people and departments that will be impacted by the resolution
Consider the timeline for the resolution’s implementation and plan accordingly
Ensure that all stakeholders are informed about the resolution and its implications
Develop a plan for the resolution’s implementation and make sure it is communicated to all affected parties
Once the plan is in place and all stakeholders are informed, you can move on to the next step.

Tips for Drafting an Effective Corporate Resolution

Research the purpose of the corporate resolution: Identify the purpose and the desired outcome of the resolution.
Consider the facts: Make sure to include facts and evidence to support the resolution.
Draft the resolution: Outline the resolution in a clear, concise manner that is easy to understand.
Clarify the language: Avoid vague or ambiguous language, and make sure to include any legal jargon that is necessary.
Double-check the resolution: Make sure the resolution is consistent with applicable laws and the corporate charter.

You will know you can check this off your list and move on to the next step when you have completed the research, considered the facts, drafted the resolution, clarified the language, and double-checked the resolution to ensure it is consistent with applicable laws and the corporate charter.

Researching and understanding applicable laws

Research any applicable state laws to get an understanding of the rules and regulations your company needs to adhere to when drafting a corporate resolution
If you are unsure of any laws, consult an attorney for clarification
List out any laws you need to be aware of when drafting the resolution
Once you have a thorough understanding of the applicable laws and regulations, you can now move on to writing clear and concise language for the resolution.

Writing clear and concise language

Review applicable laws and research to ensure you understand the context of the resolution
Use language that is simple, clear, and direct
Avoid jargon and technical language
Be concise and to the point
Double-check your language to make sure it is unambiguous and free of any potential interpretations
When you are satisfied with the language, the resolution can be considered complete.

Making sure the resolution is clear and unambiguous

Read the resolution several times to ensure that it is written in plain language and that the meaning is clear
Make sure that all terms used are industry-standard and that the language is unambiguous
Double-check for any potential for misinterpretation or confusion
Cross-reference the resolution with any existing corporate documents to make sure it is consistent
Once you are sure that the resolution is clear and unambiguous, you can check it off your list and move on to the next step.

Seeking advice from a legal expert when needed

Consult with a qualified lawyer or legal expert to ensure that the resolution will be legally binding in the jurisdiction in which it will be used.
Ask questions to ensure that the resolution is clear and unambiguous, and that it contains all the necessary elements.
Determine whether any additional documents or policies must accompany the resolution.
Collect the necessary documents and information and provide them to the lawyer or legal expert.
Once the lawyer or legal expert has reviewed the resolution and provided advice, make any necessary changes to the resolution.
Once the resolution meets the legal expert’s approval, it is ready to be adopted.

FAQ

Q: What is the difference between a corporate resolution and a board resolution?

Asked by Stephanie on 6th April 2022.
A: Corporate resolutions are documents that are passed by the shareholders of a corporation, while board resolutions are documents that are passed by the board of directors of a corporation. A corporate resolution is generally more formal and comes with certain requirements for it to be legally binding and effective, whereas a board resolution may not require as much formality to be legally b