Board Resolution Meaning: Everything You Need to Know
Board resolution, or corporate resolution, is a formal document identifying roles of corporate officers along with board meeting decisions and results.3 min read
Board resolution meaning is that it's a formal document identifying roles of corporate officers along with board meeting decisions and results. A business owner has a lot of responsibility, and knowing how to handle the day-to-day duties of your company is important for allowing your company to grow and prosper. You are also required to answer not only to shareholders but also to a board of directors that are tasked with making major decisions including current and future actions of a business.
A company's board of directors acts as the company's governing body and is responsible for all of the corporation's major decisions. The board of directors is usually made up of:
- Large shareholders
- Equity partners
- Senior officers
Your company board is likely to meet on a predetermined schedule and but will also hold what is referred to as an emergency meeting in the event that they need to handle a pressing decision or other urgent matters that need to be resolved. The decisions that are made during these meetings are referred to as board resolutions.
What Is a Board Resolution?
A corporate resolution, otherwise known as a board resolution, is a formal document that identifies the roles of the corporate officers as well as the decisions and results of any voting that the board meeting resulted in.
Board resolutions are often certified by either the board secretary or board assistant secretary. Otherwise, the certifying party should be someone that the board has designated to perform such tasks. A board resolution is an official document giving the committee the authorization to take action on what the board voted on. Resolutions can also be written when a new member has been voted onto the board.
There are other times when a board resolution can be passed as well, including:
- Expanding the company
- Hiring or letting go of a significant amount of workers
- Selling additional shares of the company
- Purchasing intellectual property rights
- Major decisions that will drastically affect the company
There are many entities that require information on board resolutions such as:
- Brokerage firms
- Asset managers
- Title agencies
A board resolution is typically used to put information voted on and decided on into writing to make it part of the company record. You will be required to obtain a board resolution document if:
- You require a record of what went on during the board meeting.
- You need documentation of what the shareholders of the corporation decided.
Board resolutions serve as compliance documents when there is a need to verify the choices that both shareholders and directors have made in regards to the company. These resolutions are often sent to agencies that need a record of the goings-on of a corporation such as government agencies or oversight committees. You should always keep copies of all your board resolutions with your other bookkeeping information in the event a shareholder puts in a request to view them.
It is important to remember that corporate resolutions are legally binding documents and should always be included in the minutes of the meeting during which they were passed.
Corporate Resolutions and a Company's Board of Directors
The board creates mandates in an attempt to create and establish the policies that the management utilizes to aid them in making decisions on critical company measures. This is required for every public company.
Some of the board decisions and responsibilities include:
- Determining when to distribute corporate dividends
- Firing or terminating the employment of executives
- Setting the policies for options
- Determining executive compensation
- Supporting executive duties
- Aiding the corporation in setting branding goals
- Making sure that the company has adequate resources at its disposal
Types of Resolutions for a Community Association
There are many types of board resolutions that the board of directors of a community association may pass. Some of these include:
- Resolutions for policies that will affect owners' obligations and rights. These can include the rules decided on for recreational facilities and common areas.
- Administrative resolutions that will address the internal operations of the association. This can include collection procedures, operating procedures, and the location of board meetings.
- Special resolutions that can apply to policies and rules for individual situations.
- General resolutions such as contract approval and budgets.
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