It can be difficult to keep track of major decisions and choices that your company and its shareholders have made over time. This is where Incfile’s Corporate Resolution template can help provide a concrete record for legal purposes and act as a compliance document.
What Is a Corporate Resolution Template and Who Needs One?
A corporate resolution is a formal record of major decisions made by a company’s shareholders or board of directors. The corporate resolution template records the decision and its details, as well as the signatures of the directors or members who sign to agree. Whenever your business is making any major decision, you should use a corporate resolution template.
A resolution document can have legal ramifications, mostly because the signatories are bound by the agreement in the document. It then becomes an important compliance tool. They’re commonly used by Limited Liability Companies (LLCs), S Corporations, C Corporations or Limited Liability Partnerships. You can also check out our video that helps explain the role of a corporate resolution form.
When Should You Use a Corporate Resolution Form?
A corporate resolution template can be used for a range of situations and actions. Whenever your company or board is making a big decision during a meeting that has legal, financial or structural implications, it’s a good idea to draft a corporate resolution.
Our Corporate Resolution form template will help you draft your very own document for the next time you adopt a major change or formal action at a meeting.
Common uses for a corporate resolution include:
- Voting in a new board member
- Hiring a new employee
- Selling shares and managing assets
- Opening, closing or changing a bank account
- Borrowing capital or opening a new credit line
- Entering into contracts or closing a contract
While a corporate resolution is generally an internal document to record decisions, it may also be required under some legal circumstances, such as IRS audits or by shareholders, as it is a paper trail of important decisions.
Some industries, such as the banking and security industry, may require corporate resolutions under federal or state law. For example, a bank may ask for proof of a corporate resolution if an individual from the company wants to open, close or change an account.
What to Include in a Corporate Resolution Document
The corporation’s name and address of the business
When the meeting regarding the resolution was held
What resolution was adopted and agreed upon (describe each decision separately if there were multiple related to the same matter)
The names of directors and members agreeing to the resolution
The signatures of those directors and members
Tips for Drafting Your Corporate Resolution Template
- Corporate resolution templates don’t have to be overly complicated, as long as you have the key pieces of information about the decisions and the required signatures.
- Stay away from ambiguous wording and unnecessary information. It’s best to create a short document that is easy to understand and clear and concise to eliminate confusion.
- You can tailor a corporate resolution template easily to suit whatever it is you’re recording. The basic structure is similar no matter what the resolution is.
While a corporate resolution template is a basic and straightforward document, it has important implications for a business. Recording and signing off on all major decisions is a great way to keep track of changes, use for compliance purposes and prove that certain actions were agreed upon.
Having a template on hand to tailor to your own needs is useful for future company meetings and major verdicts, which is why Incfile’s template is ready for you to download and customize. Don’t forget to visit Incfile’s Business Resource Center for more templates and tools to launch your business.
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