How to Write a Corporate Resolution

Corporate Resolution - What to Include
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Every business makes decisions, and those decisions must be agreed on and put in writing. That's what a corporate resolution does.  

Why a Corporation Needs Corporate Resolutions 

A corporate resolution documents actions and decisions of a corporation's board of directors. Basically, anything the corporate board does must be put in the form of a resolution. The purpose of these resolutions is to create documents that hold the board accountable and that show licensing boards and state and federal regulators (including the IRS) that the board is acting according to its fiduciary responsibilities.

  

Corporations are separate entities from their owners and they have separate liability from these owners. In order to uphold this separation, the corporation must act independently from the owners. This is called a corporate shield or corporate veil, which protects the owners from the liabilities of the corporation. Corporate resolutions help demonstrate this independent action. 

Corporation boards don't need to have resolutions for day-to-day activities of the business, like hiring individual employees (not executives), making payments on debts, or taking on new customers. These activities are under the direction of corporate officers (CEO, president, etc.), who have been given their authority by the board. 

Corporate resolutions are required for both C corporations and S corporations

Typical Corporate Resolutions

A corporate resolution needs to be on file for any major decision made by the board of directors.

Here are some examples of corporate resolutions, from initial incorporation documents to closing the business. 

At initial incorporation, the board might create corporate resolutions to approve new board members and officers, accept the initial bylaws, setting up a corporate bank account at a specific bank, and designating signers for that account

Some other typical resolutions that a board of directors might create during the course of business would be: 

  • Buying or selling the corporation's real estate 
  • Designating corporate officers
  • Deciding to join another business in a joint venture
  • Setting up a location in a new state or states
  • Purchasing a patent or adopting a new trademark
  • Taking out a loan 

What to Include in a Corporate Resolution Form

The exact form of a corporate resolution is determined by your state's business services department, but in general, a corporate resolution must include: 

  • The date and place of the resolution
  • The state in which the corporation is formed and under whose laws it is acting
  • Signatures of officers designated to sign corporate resolutions––usually the board chairperson
  • Title the document with its purpose. For example, "Resolution to Accept Bank Depository." 
  • A phrase stating that the resolution has the consent and agreement of the board members. If the resolution passes by unanimous consent, state this. If consent is not unanimous, you will need to include a list of board members and their "yea" or "nay" votes. 
  • A "whereas" statement or statements indicating the intentions of the board in creating this resolution. For example, "Whereas it is the intention of this board to designate a bank account...." 
  • A "therefore" or "resolved" statement that specifies the action to be taken. For example, "Therefore by written unanimous consent...the designation of XYZ bank as a depository of the Corporation is approved."

As an example, Northwest Registered Agents has a sample corporate resolution form. 

How a Corporate Resolution is Created

Most corporate resolutions are created and signed at a corporate board meeting. Here's a typical process: 

  • The agenda for a board meeting is created before the meeting and sent to all board members, and the item to be resolved is included on the agenda. 
  • At the meeting, the agenda item for the resolution is brought up and discussed. 
  • The resolution is voted on and votes are recorded. 
  • The minutes of the meeting should include the information on the resolution being approved (or not). 

    After the Corporate Resolution is Signed

    The corporation's secretary has the role of filing all corporate resolutions in the corporate records book. These resolutions don't need to be submitted to any governmental agency, but they must be available if the corporation is audited by the IRS or other agency, or by the business department in the state where the corporation is located. 

    Shareholder Resolutions 

    The shareholders of a corporation may also file resolutions. These resolutions are often created at an annual meeting of the corporation. If the corporation's stock is publicly held (sold to the public), the shareholder resolution process is regulated by the Securities and Exchange Commission (SEC)

    These resolutions are non-binding, that is, the corporate board is not required to do anything to enact them. They are typically presented by activist groups to influence the board on environmental, social, ethical, or human rights issues.