What is a Corporate Resolution To Sell Assets?
A corporate resolution to sell assets records the board's decision to dispose of company property in England and Wales and provides the authority for named individuals to execute the relevant documentation. Under the Companies Act 2006, the board is generally responsible for day-to-day asset management, but significant disposals require careful documentation to satisfy directors' duties, protect against insolvency challenge, address potential shareholder-approval requirements, and support the company's tax and VAT compliance obligations.
About the Corporate Resolution To Sell Assets
When your corporation needs to sell significant assets, a Corporate Resolution To Sell Assets provides the formal legal authorization required under United States law. This document serves as official proof that your board of directors has properly approved the transaction and granted specific authority to corporate officers to execute the sale.
When do you need this document?
You need this resolution when selling any substantial corporate assets, including real estate, equipment, intellectual property, or business divisions. Federal securities laws may require this documentation for publicly traded companies selling material assets. Many states mandate board resolutions for asset sales exceeding certain thresholds or representing significant portions of corporate value. Banks, title companies, and buyers typically require this resolution as proof of proper authorization before completing transactions. Additionally, if your sale triggers Hart-Scott-Rodino Act reporting requirements due to transaction size, you'll need documented board approval.
Key legal considerations
Your resolution must clearly identify the specific assets being sold and include detailed descriptions to avoid ambiguity. The authorization section should specify which officers have power to execute sale documents, negotiate terms, and sign closing papers. Consider whether shareholder approval is required under your state's corporation act or your company's bylaws for substantial asset sales. If you're a public company, ensure compliance with Sarbanes-Oxley Act disclosure requirements and Securities Exchange Act provisions. Include provisions for tax considerations under the Internal Revenue Code, particularly if the sale involves depreciated assets or creates significant gains. Be aware of state fraudulent transfer laws that could void sales made to defraud creditors.
Legal requirements in United States
Federal law requires specific documentation standards for publicly traded companies selling material assets under Securities Exchange Act regulations. The Hart-Scott-Rodino Antitrust Improvements Act mandates government notification for large transactions exceeding statutory thresholds. State corporation acts vary but generally require board resolutions for significant asset dispositions, with some states requiring supermajority board votes or shareholder approval. Delaware General Corporation Law, governing many corporations, provides specific procedures for asset sales requiring stockholder consent. Your corporate secretary must certify the resolution's authenticity and maintain it in corporate records. The resolution should reference compliance with applicable state fraudulent transfer statutes to protect against later challenges. Ensure the document includes proper corporate formalities like official letterhead, board meeting minutes references, and authorized signatures to maintain legal validity.
Governing law
Applicable law
This Corporate Resolution To Sell Assets is drafted to comply with England and Wales law. Key legislation includes:
- Companies Act 2006 (Part 10 - Directors' Duties): Directors selling company assets must act in good faith to promote the company's success, exercise reasonable care, and avoid conflicts of interest; the resolution evidences compliance with these duties.
- Companies Act 2006 (sections 190-196 - Substantial Property Transactions): Disposals of non-cash assets worth more than 100,000 pounds or 10% of net assets (whichever is lower, but at least 5,000 pounds) to a director or connected person require prior shareholder approval by ordinary resolution.
- Insolvency Act 1986 (sections 238-246): Asset sales at undervalue made within two years of insolvency may be set aside by a liquidator; the resolution should record the commercial rationale and confirmation of fair value to protect against later challenge.
- Value Added Tax Act 1994: Disposal of business assets may trigger a VAT charge; if the assets form part of a transfer of going concern (TOGC), special rules apply and should be addressed in the sale agreement.
- Taxation of Chargeable Gains Act 1992: A company selling a chargeable asset realises a gain for corporation tax purposes; the board resolution should be consistent with the tax planning position taken in the accounts.
- Competition Act 1998: For large-scale asset disposals that reduce competition, the Competition and Markets Authority may need to be notified under merger control provisions; directors should confirm no merger control filing is required.
