Overview of Director Resolutions

 

What is this document?

Director Resolutions are decisions made by the directors of the corporation.  These resolutions relate to managing the corporation and include decisions such as issuing shares, appointing officers, financial matters and approving major agreements entered into by the corporation.

 

When would I use this document?

All decisions relating to shares, officers, financial matters, corporate structure and major contracts should be recorded in written resolutions.  These resolutions are kept in the corporate minute book and are subject to examination by financial auditors and potential lenders and investors interested in knowing that all corporate acts have been properly authorized.

 

Who Signs this Agreement?

The directors of the corporation sign the directors’ resolutions.

 

More details about this document

When the company is incorporated, the initial director resolutions will establish the initial corporate officers, by-laws, where the company records are located, initial year end and form of share certificate.  The shares may be issued at the time of incorporation or at a later date.

Unless otherwise provided in the articles, by-laws or a unanimous shareholders’ agreement, the board of directors will have authority to manage the corporation. Their decisions are formalized in directors’ resolutions. These resolutions are the legal act of the corporation.

If the shareholders have been given authority to make certain decisions, those decisions must be formalized in a shareholders’ resolution, and kept in the corporate minute book.

 

What are the core elements of this document?

The core elements of the resolutions include: Name of the Corporation, Effective Date, Background, Resolution and Signature Lines. The ‘Background’ will provide a context for the decision that has been made, and the ‘Resolution’ is the actual decision that has been approved by the directors.

Resolutions may also have Schedules which contain agreements that have been approved in the resolutions, and additional clauses such as Counterparts, and Authorized Director or Officer.

 

Related Documents

Asset Purchase Agreement – an agreement for the sale of the assets of a business

Share Purchase Agreement – an agreement for the sale of shares

Shareholders’ Resolution – a resolution by the shareholders approving a transaction or decision, or electing directors

Minute Book – this is where the corporate records including all director and shareholder resolutions are kept

 

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