What is a Board Resolution For General Authorisation?
A board resolution for general authorisation delegates a defined range of powers from the board to one or more named individuals, enabling them to act on the company's behalf without requiring a specific resolution each time. Under the Companies Act 2006, directors may delegate freely within the limits of the articles. The resolution must specify the scope and financial limits of the authority granted, and be retained in the company's statutory records.
About the Board Resolution For General Authorisation
A Board Resolution For General Authorisation is a formal corporate document that allows your company's board of directors to delegate specific powers and authority to designated individuals within your organization. This resolution serves as official documentation that certain officers, managers, or employees have been granted the legal authority to act on behalf of your company in defined capacities, ensuring business operations can continue efficiently while maintaining proper corporate governance.
When do you need this document?
You need this resolution when your company requires formal delegation of authority for day-to-day operations or specific business transactions. This typically occurs when appointing new officers who need authority to sign contracts, authorize expenditures, open bank accounts, or represent the company in legal matters. The resolution is also essential when existing authority needs to be modified, expanded, or clarified, particularly following organizational changes or when entering new business ventures that require different levels of authorization.
Key legal considerations
The resolution must clearly define the scope and limitations of the authority being granted to prevent unauthorized actions that could expose your company to liability. Key provisions should specify the types of transactions covered, monetary limits for financial decisions, duration of the authorization, and any reporting requirements. You must ensure the resolution aligns with your company's bylaws and articles of incorporation, as these documents may impose restrictions on delegation of authority. The resolution should also include proper certification procedures and specify whether the authority can be sub-delegated to other parties. Additionally, consider including provisions for revocation of authority and notification procedures to ensure proper corporate control.
Legal requirements in United States
Under United States corporate law, board resolutions must comply with both state corporation laws and federal securities regulations. If your company is incorporated in Delaware, the Delaware General Corporation Law governs the board's authority to delegate powers and establish proper corporate procedures. For publicly traded companies, the Sarbanes-Oxley Act imposes additional requirements for internal controls and accountability in financial reporting and authorization processes. The Securities Exchange Act may also apply if the authorized actions involve securities transactions or public company reporting obligations. Your resolution must follow your state's corporate formalities, including proper notice procedures, quorum requirements for board meetings, and documentation standards. Some states require specific language or certification procedures for authority delegation, particularly for banking and financial transactions. Federal banking regulations may also impose additional requirements if the resolution involves financial institution relationships or electronic fund transfers.
Governing law
Applicable law
This Board Resolution For General Authorisation is drafted to comply with England and Wales law. Key legislation includes:
- Companies Act 2006 (s. 171): Directors must act within their powers when delegating authority; a general authorisation resolution must remain within the scope permitted by the articles of association.
- Companies Act 2006 (s. 40): Third parties dealing with a company in good faith may rely on the authority of an officer acting under a board-authorised general authorisation, even if internal procedures are imperfect.
- Companies Act 2006 (s. 172): Directors must act in good faith to promote the success of the company; an overly broad general authorisation that could expose the company to unchecked commitments may not satisfy this duty.
- Companies Act 2006 (ss. 248-249): General authorisation resolutions must be recorded in board minutes and retained for at least ten years as part of the company's statutory records.
- Model Articles for Private Companies (SI 2008/3229, Art. 5): Directors may delegate any of their powers (including under a general authorisation) to any person, subject to any conditions or restrictions imposed by the board at the time of delegation.
