What is this document?
Certain decisions made by the directors must be approved by the shareholders of a corporation. This resolution documents shareholder approval of a share split, which is a conversion of a specified number of shares into a larger specified number of shares at a particular ratio e.g. each share splits into 2 or 3 shares.
When would I use this document?
The resolution would be used where the corporation wishes to approve a share split. It will be used in conjunction with a Directors’ Resolution approving the same. A share split can be sought under a number of different circumstances, and can be part of a corporate restructuring for tax planning purposes.
Who Signs this Agreement?
This resolution will be signed by the shareholders of the corporation.
More details about this document
When a share split is approved by this resolution, the capital held by each shareholder will change. As a result, an updated capitalization table should be appended as a schedule to the signed resolution. If the share split is occurring pursuant to the terms of share split agreement, a copy of that agreement should also be appended as a schedule to the signed resolution.
What are the core elements of this document?
The core elements of the resolution include: Name of the Corporation, Effective Date, Background, Resolution, Signature Lines, and Share Capitalization Table.
The ‘Background’ will provide a context for the decision that has been made, and the ‘Resolution’ is the actual decision that has been approved. 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
- Minute Book - this is where the corporate records are kept
- Share Split Agreement - an agreement determining how shares will be split
- Directors’ Resolution - major decisions (or other decisions as required in a shareholders’ agreement) and matters pertaining to share structure will need to be ratified by the directors of the corporation
- Shareholders’ Resolution - a resolution by the shareholders approving a transaction or decision, or pertaining to share structure or electing directors