Drafting a Corporate Resolution

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By David Gass

Drafting a corporate resolution is part of the formal process to have a decision taken by the Board of Directors of a company that can authorize the officers or management of the corporation to undertake actions on behalf of the company. The drafting of a corporate resolution should provide exact advice to the corporation’s management on specific matters regarding the operation of the business. This crafting of a corporate resolution must make clear the intent of the resolution to amend the corporations existing terms of reference, by-laws or regulations and should note any legal or financial implications of the resolution.

Drafting a corporate resolution can be done to cover a wide range of topics and issues that can then be used to hire or appoint the officers of the company, hire or fire employees, or refer a matter to a subcommittee of the Board of Directors for further study and review.

The drafting of a corporate resolution may also serve to approve major transactions or mergers involving the corporation or to allow the business to buy new equipment, property, land or facilities that are required by the company. Sometimes drafting a corporate resolution is also done in order to approve the sale of company property or assets, to issue new stock in the company, or to alter the ownership structure of the business.

Drafting a corporate resolution is a way to place these issues before the Board of Directors by shareholders, the managers or management of the business, or by the Board of Directors or the officers of the corporation. All corporate resolutions must be passed by a majority of the Board of Directors meeting in session and any corporate resolutions which receive this approval have to be recorded in the minutes of that Board of Directors meeting.

After drafting a corporate resolution it should be checked by legal counsel to assure that they meet the requirements of corporate legislation and the test of good governance. Once they are approved these corporate resolutions have to be filed with the appropriate regulatory body in which the corporation has been registered and all shareholders must receive notice that the corporate resolution has been passed by the Board of Directors.

All corporate resolutions which have been approved during the business year must be also presented to the Annual General Meeting of the corporation and the officers of the Board of Directors need to be available to answer questions to the shareholders at this meeting to answer any questions they may have about the corporate resolutions. A good process for drafting a corporate resolution can assist the Board of Directors to deal with these resolutions at the Annual General Meeting of the company

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