Understanding How to Write a Board Resolution Letter is a crucial skill for anyone involved in the governance of a company or organization. These official documents, passed by a board of directors, formally record decisions made by the board. They serve as a vital piece of corporate history, providing clarity, legal standing, and a reference point for future actions. This guide will walk you through the essential steps and considerations when crafting a board resolution.
Understanding the Core Components of a Board Resolution
When you're learning How to Write a Board Resolution Letter, the first step is to grasp its fundamental structure and purpose. A board resolution is not just a casual memo; it's a formal legal document that records a specific decision or action taken by the board of directors. The importance of a well-written board resolution cannot be overstated; it provides clear evidence of the board's intent and authorization, which is critical for legal compliance, financial transactions, and operational clarity.
Here are the key elements you'll typically find:
- Resolution Number: A unique identifier for tracking purposes.
- Date: The date the resolution was adopted.
- Preamble (WHEREAS clauses): These clauses provide background information and the reasons why the resolution is being passed. They set the context for the decision.
- Operative Clause (RESOLVED clauses): This is the core of the resolution, stating the specific action or decision being authorized or taken.
- Signatures: Signatures of the board members or the corporate secretary, indicating official adoption.
Here's a basic framework:
- Identify the need for a resolution.
- Draft the WHEREAS clauses to explain the situation.
- Draft the RESOLVED clauses to state the action.
- Ensure proper formatting and legal language.
How to Write a Board Resolution Letter to Authorize a New Bank Account
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Open a New Bank Account
WHEREAS, it is necessary for [Company Name] to establish a new banking relationship to facilitate [specific reason, e.g., expansion, new project funding]; and
WHEREAS, [Bank Name] has been identified as a suitable financial institution to provide the required banking services;
RESOLVED, that [Company Name] hereby authorizes the opening of a new business checking account with [Bank Name].
RESOLVED FURTHER, that [Name and Title of Authorized Signatory 1] and [Name and Title of Authorized Signatory 2] be, and hereby are, authorized to sign on behalf of [Company Name] for all transactions related to this new bank account.
RESOLVED FURTHER, that the appropriate bank resolution forms provided by [Bank Name] shall be completed and submitted by the Corporate Secretary or their designee.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Approving a Contract
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Approve [Contract Name] with [Third Party Name]
WHEREAS, [Company Name] has negotiated the terms of an agreement for [briefly describe the goods or services] with [Third Party Name]; and
WHEREAS, the proposed contract, attached hereto as Exhibit A, has been reviewed by legal counsel and is deemed to be in the best interest of [Company Name];
RESOLVED, that [Company Name] hereby approves the [Contract Name] with [Third Party Name], as presented and attached.
RESOLVED FURTHER, that [Name and Title of Authorized Signatory] be, and hereby is, authorized to execute the [Contract Name] on behalf of [Company Name].
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Appointing a New Officer
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Appoint [New Officer Name] as [New Officer Title]
WHEREAS, the position of [New Officer Title] has become vacant due to [reason, e.g., resignation, expansion]; and
WHEREAS, [New Officer Name] possesses the necessary qualifications and experience for the role of [New Officer Title];
RESOLVED, that [New Officer Name] be, and hereby is, appointed as the new [New Officer Title] of [Company Name], effective [Date].
RESOLVED FURTHER, that [New Officer Name] shall assume all duties and responsibilities associated with the office of [New Officer Title] as outlined in the company bylaws and as directed by the board.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Authorizing a Share Issuance
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Authorize Issuance of Additional Shares
WHEREAS, the board of directors of [Company Name] has determined that it is in the best interests of the company to raise additional capital by issuing new shares of common stock; and
WHEREAS, [Number] new shares of common stock, par value $[Par Value] per share, are to be issued at a price of $[Price] per share;
RESOLVED, that [Company Name] hereby authorizes the issuance of up to [Number] shares of its common stock, par value $[Par Value] per share, at a price of $[Price] per share, to [Name of Investor(s) or "such investors as determined by management"].
RESOLVED FURTHER, that the officers of the company are authorized to take all necessary actions to effectuate this share issuance, including the preparation and filing of any required documents with regulatory authorities.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Approving Annual Financial Statements
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Approve Annual Financial Statements for Fiscal Year Ended [Year]
WHEREAS, the management of [Company Name] has prepared the financial statements for the fiscal year ended [Year], including the balance sheet, income statement, and cash flow statement; and
WHEREAS, these financial statements have been reviewed by the Audit Committee and presented to the full board for approval;
RESOLVED, that the annual financial statements of [Company Name] for the fiscal year ended [Year], as presented to the board, are hereby approved.
RESOLVED FURTHER, that the officers of the company are authorized to take all necessary steps to finalize and disseminate these financial statements as required by law and company policy.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Authorizing a Property Purchase
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Authorize the Purchase of Real Property at [Property Address]
WHEREAS, [Company Name] has identified a need for additional office space to support its growing operations; and
WHEREAS, the property located at [Property Address] has been evaluated and deemed suitable for purchase by the company, with an agreed-upon purchase price of $[Purchase Price];
RESOLVED, that [Company Name] hereby authorizes the purchase of the real property located at [Property Address] from [Seller Name] for a total purchase price of $[Purchase Price].
RESOLVED FURTHER, that [Name and Title of Authorized Signatory] be, and hereby is, authorized to execute all necessary purchase agreements, deeds, and other documents to complete this transaction.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Dissolving a Subsidiary
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Dissolve [Subsidiary Name]
WHEREAS, [Company Name] has determined that the continued operation of its subsidiary, [Subsidiary Name], is no longer in the best interests of the parent company; and
WHEREAS, all outstanding debts and obligations of [Subsidiary Name] have been satisfied or adequately provided for; and
WHEREAS, the necessary steps for dissolution have been reviewed and approved;
RESOLVED, that [Company Name] hereby approves the dissolution of its subsidiary, [Subsidiary Name].
RESOLVED FURTHER, that the officers of [Company Name] are authorized to take all necessary actions to effectuate the dissolution of [Subsidiary Name], including filing all required legal documentation and distributing any remaining assets in accordance with applicable law.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
How to Write a Board Resolution Letter for Declaring a Dividend
To: The Directors of [Company Name]
From: [Corporate Secretary Name/Title]
Date: [Date]
Subject: Resolution to Declare a Cash Dividend
WHEREAS, [Company Name] has achieved strong financial performance for the [period, e.g., quarter, year]; and
WHEREAS, the board of directors has determined that it is in the best interest of the company and its shareholders to distribute a portion of its retained earnings;
RESOLVED, that a cash dividend of $[Amount] per share be, and hereby is, declared on the outstanding common stock of [Company Name], payable on [Payment Date] to shareholders of record as of [Record Date].
RESOLVED FURTHER, that the officers of the company are authorized to take all necessary steps to facilitate the payment of this dividend.
Adopted this [Day] day of [Month], [Year].
[Signature of Board Chair]
[Printed Name of Board Chair]
[Title of Board Chair]
In conclusion, mastering How to Write a Board Resolution Letter is an essential part of good corporate governance. By following these guidelines and tailoring the resolution to the specific decision at hand, you can ensure clarity, enforceability, and a solid record of your board's actions. Always consult with legal counsel to ensure your resolutions comply with all relevant laws and regulations.