1. Why Is a Certified Board Resolution Needed?
2. Steps to Creating a Certified Board Resolution
3. Elements of a Certified Board Resolution

A certified board resolution is a written document that provides an explanation of the actions of a company’s board of directors that has been verified by the secretary of the organization and approved by the board’s president. It gives authority to an individual or group to act on behalf of the corporation.

There is often confusion as to the difference between a board resolution and board minutes. Both are important records of the activities of the board of directors of a company. However, board minutes describe all the discussions and resolutions that occur over the course of board of directors meeting. It is prepared after the meeting has concluded. A resolution, on the other hand, describes one action taken by the board at a meeting, is prepared separately during the meeting, and is attested to by the secretary of the corporation before the president approves it.

Why Is a Certified Board Resolution Needed?

State laws under which a corporation is formed require that whenever a board of directors makes a decision or desires to take an action and it is voted on and approved by a majority of the board, a certified board resolution be created. This document is then made available to the public. The most common reasons for having a board resolution certified include:

  • Opening financial accounts: Banks commonly request an individual representing a corporation to produce a certificate of authority that establishes his or her authority to make payments and conduct financial activities on behalf of the company.
  • Conducting business: Representatives of a corporation, such as an employee or manager who is not on the board of directors, is often asked by other companies to disclose that the board of directors has given the representative permission to enter into agreement on behalf of the corporation. A certified board resolution is accepted as proof.

Steps to Creating a Certified Board Resolution

In order to prepare and execute a certified board resolution, the secretary of the corporation should follow these procedures:

  • Review the corporate by-laws. The rules for conducing activities of the board of directors can be found in the company’s by-laws. Among the important items to review are the requirements for establishing a quorum in order for the meeting of the board to be considered valid and voting procedures.
  • The chairperson will call the meeting to order. The chairperson is a member of the board elected for a term of usually one year and tasked with running board meetings. If the chairperson is not in attendance at a board meeting, then the CEO or president of the company or another member of the board can be designated to oversee proceedings.
  • The chairperson will call for a vote on the issue before the board.
  • The vote will be taken. If a majority of the board members are in favor of the action, the vote will pass and it will become a matter of corporate record.
  • The secretary prepares the resolution and certifies that it was adopted by the board of directors according to the procedures set forth in the by-laws.

Elements of a Certified Board Resolution

Regardless of the authority granted through the certified board resolution, the certificate is required to contain the following information:

  • Date when the resolution is passed by the board of directors.
  • A designation of the party for whom the resolution is being prepared for and its address.
  • Explanation of the action being taken by the board of directors and the reason for doing so.
  • Name of the secretary.
  • Legal name of the corporation and state of incorporation.
  • Names of the board of directors voting for approval of the resolution.
  • Meeting details, such as the date of the meeting, number of directors in attendance and how the directors in attendance voted.
  • Name of the individual(s) being granted authority to act on behalf of the corporation, if necessary.
  • Validation that all statements and declarations contained in the certificate are true and signature of the secretary to that effect.
  • Imprint of the corporate seal.

Corporate resolutions reflect the major decisions taken by a company’s board of directors. They establish policies for managing a company. They can take many forms and can be used to authorize hiring decisions, officer compensation, dividend distribution, or any critical issue facing the business.

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