A corporate resolution is used by a company’s board of directors to put decisions in writing. It shows that the business had the authority to make a specific choice or action. It creates a record of major decisions by the shareholders or the board of directors.
Every business needs to make important decisions, and a free corporate resolution template can help you make those decisions correctly. Legal Templates can help you create a corporate resolution that fits your company.
What is a Corporate Resolution?
A corporate resolution is a written record of a major decision by a company. It is primarily used to record the decision of the shareholders or board of directors and provide written evidence of the company’s authority to undertake that action.
They also serve as important compliance documents that show the shareholders or directors complied with company policy, state and federal law, or relevant regulations. This legal record could be essential to prove that the action was appropriate and permissible. Corporate resolutions are commonly used by companies such as:
- S-corps
- C-corps
- Limited liability partnerships
- Limited liability companies (LLC)
When to Use a Corporate Resolution?
Your business should use a corporate resolution to document any major decisions made during a shareholder or board of directors meeting. A corporate resolution is generally a required document for both C-corps and S-Corps. Major decisions may include, but are not limited to:
- Opening a new corporate bank account
- Transferring business ownership
- Hiring a new employee
- Voting in a new board member
- Selling shares of stock
- Designating corporate officers
- Setting up a new location or place of business
- Adopting large marketing campaigns
- Taking out a loan
- When the corporate bylaws require a corporate resolution be filed
How to Write a Corporate Resolution
Writing a corporate resolution may seem difficult if you are trying to put one together yourself. Instead, you can use a corporate resolution template and our step-by-step builder to help you. The following items should be a part of your corporate resolution:
Step 1: The Company Name
The top of the resolution should include the name of the company passing the resolution. This should include the business’s legally registered name, not just the trade name.
Step 2: Jurisdiction Identification
The resolution should state under which state’s laws the company is organized and existing. This helps to identify what laws apply to the corporate resolution and to show your company is legally compliant.
Step 3: Identify the Principal Place of Business
The corporate resolution should identify the company’s principal place of business. This can have a significant impact on which laws apply to the decision and where legal claims may be filed related to the resolution.
Step 4: State That a Quorum Was Present
The corporate resolution should show that a quorum was present when the decision was made. This demonstrates that the signing members had the legal authority to take the actions listed in the resolution.
Step 5: Date the Decision Was Made
The corporate resolution form should identify on what date the decision was adopted. This is key evidence that the formalities were appropriately followed and when they occurred.
Step 6: Location Where the Decision Was Made
The resolution should also include where the decision was made. This information may have a legal impact or it may simply record the pertinent details of how the decision was made.
Step 7: Resolution Content Section
The corporate resolution should include a section that adopts the content of the resolution. This section should include all of the decisions made as part of the resolution.
For example, the board of directors may decide to hire two new executives and take out a corporate business loan all in the same meeting. Each of these decisions should be identified in the resolution’s content section.
Step 8: Officer Signature Lines
The resolution should include a section with signature lines for all of the officers. It should state that the officers of the company are authorized to carry out the acts necessary to carry out the corporate resolution. The signature lines should include:
- Signature line for each individual member
- A line for the printed name of the individual member
- A line for the date the signature occurred
Step 9: Certificate of Secretary
The corporate resolution should also include a section for the certificate of secretary. The secretary of the company should be identified by name in the resolution document. It should also include a statement that the secretary certifies the record is true and accurate.
It should also identify the date, time, and location the resolution was adopted. It should then provide a signature line, printed name line, and date line for the secretary to sign. The certificate of secretary serves as a witnessing line to what actions the members took. This may be necessary to prove that the board acted with the proper authority when making their decision.
Corporate Resolution Sample
This corporate resolution sample is provided to help you get started.
Corporate Resolution
Corporate Resolution FAQs
What is a corporate resolution for an LLC?
A corporate resolution for an LLC is a written record of important decisions made by LLC members. Most states do not require a corporate resolution for LLCs. However, it is advisable to use corporate resolutions anyway to record major decisions of the LLC. This provides the business with all of the benefits of using this important document, including keeping a legal record of these decisions.
Does a corporate resolution need to be notarized?
Corporate resolutions do not have to be notarized. It becomes legally binding because of the signatures of the parties such as the Board members or shareholders.
Is a corporate resolution the same as an operating agreement?
No, a corporate resolution is not the same as an operating agreement. An LLC operating agreement is a legal document that outlines the ownership and member duties of the LLC. It includes many details a corporate resolution does not.