Key Takeaways

  • A board resolution is a formal, legally binding decision or statement made by a company's board of directors.
  • It documents important business decisions such as executive appointments, financial authorizations, or strategic moves.
  • Board resolutions can be categorized into ordinary and special resolutions, with different approval thresholds.
  • Proper formatting and clarity are essential when drafting resolutions to ensure enforceability and accuracy.
  • Resolutions are not only for corporations—they're also used by nonprofits, community associations, and government boards.
  • A well-written resolution includes a title, background, statement of resolution, voting record, and certification.

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:

  • Banks
  • 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.

Purpose and Importance of Board Resolutions

Board resolutions serve as official records of key decisions made by a company's board of directors or governing body. These formal documents authorize actions such as signing contracts, approving budgets, issuing shares, or amending bylaws. The legal importance of a board resolution lies in its role as written evidence that a decision was duly considered, voted on, and approved in accordance with corporate governance rules.

In addition to their legal function, resolutions are important for transparency and accountability. They provide a clear audit trail that can be referenced by shareholders, regulatory bodies, or legal counsel in the future. This is especially critical when actions involve financial transactions, changes in leadership, or strategic shifts.

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

Common Types of Board Resolutions in Corporate Governance

Board resolutions come in various forms depending on the nature of the decision being made. Common categories include:

  • Ordinary Resolutions: Require a simple majority and are used for routine business decisions, such as appointing directors or approving annual reports.
  • Special Resolutions: Require a supermajority (typically two-thirds or more) and are used for significant actions like mergers, amending articles of incorporation, or dissolving the company.
  • Unanimous Written Resolutions: Adopted without a meeting, these require the written consent of all directors or shareholders entitled to vote.
  • Consent Resolutions: Used to authorize actions outside of formal meetings, especially in closely held corporations.

Each type serves a unique purpose and follows specific legal and procedural rules based on the company’s bylaws and applicable corporate law.

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.

Best Practices for Writing a Board Resolution

To ensure clarity and enforceability, board resolutions should follow a consistent structure and include the following elements:

  1. Title: Clearly state the subject of the resolution (e.g., “Resolution to Approve 2025 Operating Budget”).
  2. Date and Meeting Details: Include the date, location, and type of meeting (regular or special).
  3. Whereas Clauses: These provide background or context, outlining the reasoning behind the resolution.
  4. Resolved Clauses: This section outlines the exact action being authorized. Each clause should begin with "Resolved, that…"
  5. Voting Record: Indicate how each board member voted (approved, opposed, abstained).
  6. Certification: Signed by the board secretary or an authorized officer to verify accuracy and formality.

Clarity and formality are critical. Avoid vague language. Use precise, legally recognized terms and ensure the document is consistent with your organization's bylaws.

Who Uses Board Resolutions (Beyond Corporations)

While board resolutions are common in corporations, other entities also use them to formalize decisions:

  • Nonprofit organizations use resolutions to approve grants, appoint officers, or adopt new policies.
  • Community associations pass resolutions regarding rules, regulations, and budget approvals.
  • Government boards (like school boards or city councils) use resolutions to publicly record their stance or policy decisions.

In each case, the resolution serves as an official statement of intent or action, helping to provide structure, transparency, and legal compliance.

When Are Board Resolutions Legally Required?

Certain scenarios mandate the use of a board resolution under corporate or nonprofit law. These include:

  • Approving mergers, acquisitions, or dissolutions
  • Amending articles of incorporation or bylaws
  • Authorizing bank signatories or loan agreements
  • Appointing or removing executive officers
  • Issuing stock or declaring dividends

Failure to formally document these decisions can result in legal or financial complications, especially if regulatory bodies require proof of board authorization.

Frequently Asked Questions

  1. What is the purpose of a board resolution?
    A board resolution is used to formally record important decisions made by the board of directors, providing legal and organizational clarity.
  2. Who can write and sign a board resolution?
    Typically, the corporate secretary drafts the resolution, and it must be signed by the board secretary or another authorized officer.
  3. Are board resolutions legally binding?
    Yes, once properly passed and documented, a board resolution is a legally binding corporate record.
  4. Do nonprofits and community associations need board resolutions?
    Yes, they use resolutions to approve policies, budgets, and other formal decisions.
  5. Can a board resolution be passed without a meeting?
    Yes, if allowed by the organization’s bylaws, unanimous written consent can serve as a legally valid board resolution.

If you need help with board resolution meaning, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.