Board-Resolution

When Is a Board Resolution Required

Resolution is a document that presents boards` decisions made during the board meeting. In this article, we will consider the situations when it is required.

What is Board Resolution?

Conducting frequent meetings of the Board of Directors is a good practice for any company. Meetings allow management to analyze in detail the company’s current and projected performance and show available possibilities to develop the business, all of which enables the Board to make successful decisions.

Any kind of resolution accepted by the company for the efficient functioning of the business should be drafted on the Letterhead of the company. The resolutions drafted without the Letterhead of the company should not be considered a valid document.

Decisions and orders of the head are recorded, in particular, in resolutions. Resolutions are drawn up and formed following the requirements of national rules and national standards on record-keeping. The director considers the document and makes a resolution on its implementation. The resolution should be concise and comprehensive, contain information about the performers and the deadline. Detailed resolutions are drawn upon forms, which are then bound to the main documents and jointly formed to the case. Compliance with regulations on the content, design, and storage of resolutions – the key to quality implementation of the decisions of the head, strong discipline, and safety of documents.

The decision of the Board of Directors, made by absentee voting, comes into force from the date of sending a copy of the minutes to the members of the board of directors, but no later than the 6th day from the deadline for accepting voting ballots.

The resolution consists of the following elements:

  • the name of the performer (performers) in the dative case,
  • the content of the order,
  • deadline,
  • signature of the head,
  • date of writing.

The procedure of creating Board Resolution

There are circumstances in which it is impossible to conduct a meeting with the participation of the company’s Board of Directors, then in such cases, the directors can act by adopting a written resolution with a unanimous decision. However, it is advisable to use the services of a corporate lawyer to find out in which cases such resolutions are possible. So, when is a Board Resolution required?

This procedure gives the directors more flexibility in making their decisions since they are not required to attend a traditional board meeting. Also, the preparation of a written resolution of directors is convenient in cases where the transactions are purely formal in nature and the directors will agree to the proposed actions.

The content of the resolution is:

  • Confirmation resolution. If the document does not require any action on the part of the staff, it is accompanied by a resolution: “To execution”, “To order”, “To management”, etc., depending on which internal document of the institution takes into account its content. The signature of the head, the date are specified; the term of execution of the document is not specified, because the nearest time the corresponding internal document of the institution is meant.
  • Resolution-consideration. If the document requires action or is proposed for consideration by the team, the manager directly indicates the executor, deadline, signature, date. If the term of execution of the document is standard or it is specified in the text of the document and, accordingly, it is not necessary to specify it in the resolution, the head can specify in the resolution only a surname of the executor (executors) with initials, the procedure of preparation of the question, signature, date.