Directors Resolution

By David Gass

The corporate business of a registered corporation is conducted at either Board of Directors meetings or at the Annual General Meeting of the corporation. This business is facilitated by preparing, discussing and voting on resolutions at these meetings. There are two types of resolutions; shareholder resolutions and directors resolutions.

Shareholder resolutions are prepared and forwarded by individuals who own shares in the company and they are usually presented to the Annual General Meeting of the corporation. A shareholder may bring one shareholder resolution a year to the annual general meeting and they can be on any matter concerning the corporation, its management, or operations.

Directors resolutions can cover many of the same topics as a shareholder resolution and they may be presented at either the Annual General Meeting or at a Board of Directors meeting. Items that could be the subject of directors resolutions include any changes to the articles of incorporation and any such changes need to be filed with the regulatory body of the state in which the corporation is registered. Directors resolutions, like other corporate resolutions, become part of the formal record of the corporation and as such become an important recording of the actions taken by the Directors during their term of office. Directors resolutions are available to shareholders, regulators, legislators, and any other interested third parties who want to review the formal business of the corporation.

Some directors resolutions may be discussed and passed by the Board of Directors only, others need to be reviewed by shareholders, and any having a major impact on the interests or assets of the corporation must be discussed and approved by both the Board and the shareholders. Both the Board of Directors and shareholders must approve any directors resolution to dissolve the corporation or declare the corporation bankrupt.

Directors resolutions that cover the every day operation of the corporation do not require the approval of the shareholders at the Annual General Meeting. They can be approved by the Board at regular or special meetings of the Board of Directors. These might include hiring or employees, paying of dividends, borrowing and banking, and the regular leasing and purchasing activities of the corporation.

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