Board resolution sample || Download free format in 2021

What is a board resolution?

A corporate resolution is another name for a board resolution. It’s a formal document that puts crucial decisions made by boards of directors in writing. When appointing new directors to the board, board resolutions are generally written. Resolutions provide committees the authority to act on issues that the board has voted on. This article is about Board resolution sample .

When the board and/or its shareholders are asked to establish that the board and/or its shareholders made certain decisions about the firm or organisation, board resolutions are legal documents that also act as compliance documentation. As a record of corporate business concerns, several other entities may seek copies of board resolutions.

A board resolution acts as a legal record and provides a formal means for boards of directors to have a memorandum of their decisions in writing. Resolutions and certificates should be kept in the official records or meeting minutes by boards. Making board resolutions a frequent habit is a hallmark of excellent governance. When it comes to crafting a board resolution, a sample or template can be incredibly useful.

What should be included in Board Resolutions?

To show their unanimous approval, a resolution should be properly expressed and signed by all of the directors. The following information is included in our free board of directors resolution template:

1. The name of your company
2. Meeting date, time, and location
3. Resolution is unanimously approved, according to a statement.
4. Verification that the resolution was passed at a regularly scheduled board meeting.
5. Resolution
6. Officers are authorised to carry out the resolution, according to the statement.
7. Signatures of directors and printed names
8. Signature and written name of secretary
9. All signatures’ dates

What are the requirements needed to pass a board resolution?

The board of directors is in charge of making general corporate decisions and does not normally get involved in the day-to-day operations of the corporation. Board resolutions are passed down the corporate ladder and implemented by the various business units. As a result, board meetings are not something that happens on a daily basis.

A board resolution must meet two criteria in order to be approved:

Quorum:

The minimum number of directors required to hold a board meeting is determined by the company’s constitution. A quorum is the number of people that must be present for a meeting to take place. If a company’s quorum is set at two, it means that even if there are five directors total, at least two must attend every board meeting to pass a board resolution. Quorum requirements differ from one organisation to the next, and they are largely determined by the size of the company.

Chairperson and Casting Vote:

To guarantee that a board meeting runs smoothly, the board designates one of them as the meeting’s chairperson. In the event that there are equal votes for and against a motion, this person is also given the ability to cast a “casting vote,” which is the deciding vote. The final draft of the board resolution must be certified by the chairperson. Within a month following the meeting, the corporation records the board resolution in its books.

What is the need for board of directors resolutions?

While day-to-day operations (such as paying bills) do not necessitate resolutions, more substantial decisions should be voted on, approved, and documented in writing. For any actions with significant financial ramifications, changes in procedures, or changes in authority, corporations often require resolutions. The following activities, for example, would almost always necessitate a board resolution:

• Contracting for a long-term lease
• Getting a business bank account
• Putting a company deal into action
• Officers to be appointed
• Approving business loans
• Procedures for board meetings are being changed

Resolutions are entered into the corporate book and become part of the permanent record of the company. Although board resolutions are not submitted with any state agency (unlike articles of incorporation or annual reports), they can be audited by state agencies or the Internal Revenue Service. The following is a summary of some of the most typical reasons why boards pass resolutions:

• When extending a loan to a different company
• When electing an officer to the board of directors
• When it’s time to appoint a new board director
• When the board of directors appoints executives
• When a company seeks to sell new stock, it’s called a public offering
• When a corporation wants to submit a new patent or buy a patent that already exists
• When the board of directors wishes to enhance the size of a dividend distribution
• When the corporation buys another company
• When a firm decides to buy real estate
• When it comes to creating a bank account
• When acting on behalf of the board of directors

What are the types of Board Resolutions?

A board resolution can be approved or rejected by a simple majority vote. A show of hands, chits, or computerised techniques can all be used to do this. The passing of a resolution is dictated by the simple notion of a “majority.” The proportion of the majority required to pass a resolution may vary depending on the importance of the proposal. The following are three different sorts of resolutions:

Ordinary Resolutions:

Ordinary resolutions are those that are passed by a simple majority of the board members. The number of votes cast in favour is higher than the number of votes cast against. A resolution is considered passed if it receives a majority of slightly over 50% of the quorum. For example, a majority is defined as six yes votes out of ten. Ordinary resolutions can be made on the following topics:

• Election of Directors and Appointment of Auditors
• Declaration of dividends
• Choosing a remuneration system
• Changes to the permitted capital

Special Resolutions:

Board resolutions that require a larger majority fall into a unique category. Before convening board meetings with a special resolution agenda, prior initiation should be given. The majority percentage is predetermined by the business constitution, which is often set at 75 percent or greater. Changes in the company’s registered office from one state to another are critical considerations that require a specific resolution by the board.

• Modifications to the memorandum’s object clause
• Changes to the Articles of Incorporation
• The company’s share capital has been reduced

Unanimous Resolutions:

These board resolutions, as the name implies, require a unanimous vote of the quorum, but they are uncommon. Convening such meetings becomes logistically onerous as the number of board members grows. Shutting down the company is an extreme example of a proposal that requires majority approval. Aside from such dire circumstances, most resolutions follow the ‘ordinary’ or ‘special’ format.

SAMPLE BOARD RESOLUTION FOR BANKING

What is the procedure for passing a Board Resolution by Circulation for NRIs?

1. Decide on the Board’s approval method

Before the draft Resolution is circulated to all of the Directors, the Chairman of the Board or, in his absence, the Managing Director or, in their absence, any Director other than an Interested Director, shall decide whether the Board’s approval for a particular business shall be obtained by means of a Resolution by circulation.

2. Draft the Resolution and Addendum

Prepare a Draft of the proposed resolution for circulation, as well as all other relevant papers.

Each item of business proposed to be passed by Resolution by Circulation shall be assigned a serial number and accompanied by a note outlining the proposal’s details, relevant material facts that enable the Directors to comprehend the proposal’s meaning, scope, and implications, and the nature of any Director’s concern or interest in the proposal, which the Director had previously disclosed.

The addendum must also state how a Director would signal consent or dissent to the proposed Resolution, as well as the deadline by which the Director must reply.

The deadline for replying should not be more than seven days after the draught resolution is circulated.

3. Circulation of draft Resolution

On the same day, send the resolution proposal, along with the relevant documentation, to all of the directors, including interested directors, at their addresses on file with the company in India, for their approval.

The draft and related documentation shall be forwarded to the Director’s registered postal or email address with the firm, or, in the absence of such data or any changes thereto, to any of the addresses included in the Director’s Director Identification Number (DIN) registration.

The Company must keep a record of the original Resolution’s mailing and delivery, as well as the necessary documentation.

4. Obtain Directors’ Assent or Dissent

Directors must sign the Resolution to be approved by distribution, e-mail, or any other electronic means to indicate their approval or disapproval.

The date on which the directors signed the Resolution shall be appended. The date of receipt by the Company of the signed Resolution must be treated as the date of signing if a Director does not include a date.

It will be assumed that the Director has abstained from voting if he or she does not react on or before the last day indicated for expressing assent or dissent.

5. The Director’s Conflict of Interest

In circumstances where a Director’s interest has not yet been conveyed to the firm, the Director in question must reveal his interest before the deadline for response and abstain from voting.

6. Resolution Adoption

When a majority of the Directors authorised to vote on the Resolution as approved, the Resolution is passed.

If the Articles include a special majority or affirmative vote of a certain Director or Directors, the Resolution may be passed only with the approval of that special majority or affirmative vote. A voting right is not granted to an Interested Director.

A contract or arrangement entered into or intended to be entered into by the company will be handled as if the director was a party to it.

The Resolution will be considered not passed if the consent of the majority of Directors entitled to vote is not received by the latest day stipulated for receipt of such approval.

If no other effective date is specified in the Resolution, it will be deemed passed on the last date specified for signifying assent or dissent by the Directors, or the date on which assent from more than two-thirds of the Directors is received, whichever is earlier, and will take effect on that date.

If at least one-third of the Directors (including Interested Directors) want the topic to be addressed and decided at a Meeting, each of the concerned Directors must indicate this to the other Directors before the deadline for responses.

7. Taking note of the Circulation Resolution

Resolutions passed by circulation will be reported at the following Board meeting, and the wording of the resolutions, including any disagreement or abstentions, will be recorded in the minutes of that meeting. The fact that the Interested Director did not vote on the Resolution should also be noted in the minutes.

8. Validity of the Circulation Resolution

Resolutions passed by circulation are deemed valid as if they were passed at a legally convened Board Meeting.

NON GOVERNMENT BOARD RESOLUTION

What format can NRIs follow to create a Board Resolution?

While a board resolution is a legally binding document, its format is surprisingly short and straightforward. Sometimes the language in board decisions is highly formal, and other times it is very simple. On the organization’s letterhead, board resolutions should be written. The language simply expresses the board’s decision. It also includes the action’s date and the resolution’s parties.

It’s possible that the phrasing will be something like this:

Whereas, The Community Health Clinic will continue to provide health services to its community; and whereas, The Community Health Clinic will require the authority to contract with funding sources in order to continue operations; Now, therefore, be it resolved that the Board of Directors of The Community Health Clinic hereby authorises John Smith, Board President, to act on behalf of The Community Health Clinic.

The board resolution should mention the date it was approved once it has been voted on and approved by the board. It should also mention the location where the approval was granted. The resolution should be signed by the board president and all board directors.

All board resolutions, as well as the company bylaws and other key papers, should be kept by the board secretary. In order to comply with legal requirements, the secretary should also make a copy of the board resolution available to any parties who require one. Boards should be made aware that board resolutions are legally binding and should be included in meeting minutes at all times.

How to write a Certified Board Resolution?

A certified board resolution resembles a basic board resolution in appearance. A certified board resolution provides confirmation that the resolution was confirmed by the board secretary and authorised by the board’s president, in addition to detailing a decision or action that the board wants to take and granting authority to a group or person.

What is the Board Resolution for Authorised Signatory and Opening a Bank Account?

Companies are distinguished by the fact that they function as a separate legal entity in the perspective of the law. This means the business can own property in its own name. As a result, the firm’s bank account is often opened in the name of the company. However, at least one authorised signatory must be appointed in order for this bank account to continue to function normally.

Any bank-related activities involving the company account in the future will require the signature of the person appointed as the authorised signatory.

Also read – Purchase deed format in 2021

FAQ’s

What is the procedure for approving a Board Resolution?

A Board resolution essentially certifies and documents a specific decision made by a company’s Board of Directors. The passing of the resolution for the same documents all of the Board’s pertinent decisions. However, there are some conditions that must be met in order for a resolution to be valid:

1. In order to form a Quorum, a certain number of directors must be present.
2. The resolution must be signed on the company’s letterhead.
3. Within 30 days of the Board Meeting, the resolution must be filed in the company files.
4. For the meeting, a chairperson will be chosen.