What is a Corporate Resolution Document?
A corporate resolution document records the formal decisions of a company's board of directors or shareholders in England and Wales. Companies Act 2006 Part 13 governs when resolutions are required, the majority thresholds that apply, and the record-keeping obligations attached to them. Resolutions are used to authorise significant actions (opening bank accounts, executing contracts, acquiring property, issuing shares) and provide third parties with evidence that the company's decision-making process was properly followed.
About the Corporate Resolution Document
A Corporate Resolution Document is a formal legal record that documents decisions made by your company's board of directors, shareholders, or other governing bodies. Under United States corporate law, these resolutions are required to authorize significant corporate actions and provide legal evidence that proper corporate procedures were followed. The document serves as official proof of corporate authority and is essential for maintaining corporate compliance and protecting your company's legal standing.
When do you need this document?
You need a Corporate Resolution Document whenever your company makes significant decisions that require formal authorization. This includes opening new bank accounts, where financial institutions require proof that designated individuals have authority to act on behalf of the corporation. You'll also need resolutions when entering into major contracts, acquiring or disposing of significant assets, or authorizing loans or credit facilities. Public companies must use corporate resolutions for decisions affecting securities, executive compensation, and audit committee actions to comply with Sarbanes-Oxley Act requirements. Additionally, resolutions are necessary when appointing officers, declaring dividends, or making changes to corporate structure.
Key legal considerations
The resolution must clearly identify the governing body making the decision and include specific details about the action being authorized. Proper voting procedures must be followed, with accurate records of votes cast and meeting attendance. The document should include comprehensive recitals explaining the background and reasons for the decision, as this provides important context and legal justification. Certification by the corporate secretary or other authorized officer is crucial for the document's validity. You must ensure that the resolution doesn't conflict with your corporate bylaws, articles of incorporation, or existing agreements. For publicly traded companies, additional disclosure requirements under federal securities laws may apply, and certain resolutions may need to be filed with the Securities and Exchange Commission.
Legal requirements in United States
Under United States corporate law, Corporate Resolution Documents must comply with the specific requirements of your state of incorporation. Delaware corporations, which represent a majority of public companies, must follow the Delaware General Corporation Law, which provides detailed procedures for corporate decision-making and documentation. The resolution must be adopted following proper notice requirements and quorum rules as specified in your corporate bylaws. Federal requirements under the Securities Exchange Act of 1934 apply to public companies, mandating specific procedures for certain types of resolutions. The Internal Revenue Code also impacts corporate resolutions, particularly those involving tax elections, compensation decisions, or transactions with tax implications. State Business Corporation Acts provide additional framework requirements, including filing obligations for certain types of resolutions and maintenance of corporate records.
Governing law
Applicable law
This Corporate Resolution Document is drafted to comply with England and Wales law. Key legislation includes:
- Companies Act 2006 (Part 13): Sets out the rules for company resolutions in England and Wales, distinguishing ordinary resolutions (simple majority) from special resolutions (75% majority), and prescribes when each is required.
- Companies Act 2006 (Part 3 - Company Constitution): Company articles of association define the internal decision-making procedures that corporate resolutions must comply with, including quorum requirements and voting rights.
- Companies Act 2006 (sections 248-251): Requires companies to keep records of all resolutions and minutes of meetings for at least ten years, and permits written resolutions as an alternative to holding a general meeting.
- Insolvency Act 1986: Certain resolutions, such as a resolution to wind up voluntarily, trigger obligations under the Insolvency Act and must comply with its procedural requirements.
- Land Registration Act 2002: When a resolution authorises acquisition or disposal of registered land, the resolution forms part of the authority chain that HM Land Registry may inspect.
- Financial Services and Markets Act 2000: Resolutions affecting a company's authorised share capital or listed securities must comply with FCA Listing Rules and Disclosure Guidance and Transparency Rules where the company is listed.
