Everything You Need to Know About Drafting a Board Resolution in the Philippines
For starters, even thinking about drafting a board resolution can be overwhelming. The truth is if you know the components of a board resolution, writing them is easy. Before you start, it helps to understand more about why they are written. Once you do, it will be a lot easier to start drafting a board resolution.
Why Board Resolutions are Written
A board resolution is also known as a corporate resolution, and it is a formal document that delivers a statement on an issue that the board wants to have a copy of. A resolution is a record document if compliance is necessary.
Board resolutions can be created by the board of directors of a corporation, shareholders, a government entity, or a non-profit board of directors.
There is no specific length for the resolution as long as it contains what you want to say.
What is a Board Resolution for Signing Authority?
The board resolution for signing authority authorizes certain corporate officers that can legally sign the contract on the corporation’s behalf. The types of transaction that are normally included in this are employment contracts, leases or purchases, sales contracts, and many other kinds of agreements that are business corporation material.
If the company is focused or small – or even both – these matters may not usually come up. It could be easy for up to 2 individuals to handle these kinds of agreements. However, if a company geographically expands, it can complicate things.
All boards want to be careful about who they should entrust the signing authority to because those people can also enter legal contracts with others.
How to Write Board of Resolution
- The resolution format should have the date and resolution number at the top. The number can be anything you want if it is only the board’s first one. You can use something like 0001 and then give the next ones consecutive numbers.
- The resolution title should be something that speaks about the issue in the document.
- Formal language should be used in the body, and start each paragraph with whereas. The board’s responsibility should be referenced in the first sentence.
- Continue to write each important statement of the resolution, starting each paragraph with the word whereas.
- The last board resolution statement should contain the final resolution, which is the action taken by the board.
- At the bottom, there should be a list of board member names who will vote on the resolution and spaces must be placed adjacent to their names. The spaces should let them choose “yes” or “no” for their vote. The resolution gets approval if the majority of the board votes “yes.”
- There needs to be a place for the board president to put their signature and date.
In addition, the corporate secretary or another officer – not the one who gives signing authority – should sign a certificate of corporate resolution. The resolution should also have the exact resolution wording that the board authorizes. Any contract must be signed by the authorized parties using the exact names that are in the board authorization.
In case your corporation has an official seal, it should be appropriately affixed in the resolution. If there is no seal, the “LS” notation can be written next to the corporate secretary’s signature.
If you need help with drafting a board resolution, you can contact us for our secretarial services. We will guide you on how to write the proper board resolution.