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Simple English definitions for legal terms
corporate resolution
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A quick definition of corporate resolution:
Corporate resolution: A corporate resolution is a written document that shows a decision made by the board of directors of a company. It is usually made during a board meeting and is recorded in the meeting minutes. The resolution is used to make important decisions like changing the ownership of the company, adding new board members, or selling company shares. It is also used to give permission to people to access company funds, sign checks, and get loans for the company.
A more thorough explanation:
A corporate resolution, also known as a board resolution, is a legal document that records a decision made by the board of directors of a corporation. This document is binding and outlines the actions that the corporation will take.
Corporate resolutions are typically made during board meetings and are recorded in the minutes of the meeting. They are used to make important decisions that affect the corporation, such as:
- Changing the ownership structure
- Voting in new board members
- Selling company shares
- Authorizing access to corporate funds
- Signing checks
- Acquiring loans on behalf of the corporation
For example, if a corporation wants to sell shares to raise capital, the board of directors would need to pass a corporate resolution authorizing the sale. This document would outline the terms of the sale and the actions that the corporation will take to complete the transaction.
Another example would be if a corporation wants to authorize a specific individual to sign checks on behalf of the corporation. The board of directors would need to pass a corporate resolution authorizing this action and outlining the specific terms and conditions of the authorization.