DEFINITION of 'Corporate Resolution'

A corporate resolution is a written statement, created by the board of directors of a company, detailing a binding corporate action. A corporate resolution will be found in the board meeting minutes although its form and structure can vary.

BREAKING DOWN 'Corporate Resolution'

A corporate resolution can take many forms form, including describing which officers are authorized to act (trade, assign, transfer or hedge securities and other assets) on behalf of the corporation. This is a common type of resolution, given that many banks, brokerages, and asset managers require this information, along with some title agencies.

A corporate resolution can also be created in the event that a board moves to increase the amount of a dividend distribution to shareholders. Resolutions not only provide details of the new action (in this case, the terms of new dividends), but the date of the meeting, during which the resolution was created. Other common types of corporate resolutions may involve decisions to acquire other businesses, issue new loans, purchase real estate, vote in new board members, hire executive employees, sell new shares of the corporation, and/or file for a new patent. Following a vote, the corporate resolution serves as official documentation. It does not usually need to be submitted to an oversight body or government body.

Real World Example of a Corporate Resolution

In December 2017 the National Company Law Tribunal (NCLT) extended the time, during which the firm Electrosteel Steels Limited was able to engage in its corporate insolvency resolution process. The extension is an additional 90 days, beginning January 17, 2018. The Kolkata-based Electrosteel Steels Limited was burdened with Rs 10,274 crore in debt; it owes this total to a SBI-led consortium of banks. Facing insolvency proceedings, ESL was admitted to the insolvency process. The admission recommendation originated at Committee of Creditors (CoC) committee meeting on December 6, 2017. NCLT executive members noted that meeting minutes underscored the CoC's approving the resolution by 99.82%.

Corporate Resolutions and A Company’s Board of Directors

As noted above, the Board of Directors of a corporation is responsible for making major decisions. The Board’s mandate is to establish policies for management and make decisions on critical company issues. This is required of every public company. Board decisions include when to distribute dividends, the hiring and firing of executives, options policies, and executive compensation. In addition to those duties, a board of directors is responsible for helping a corporation set broad goals, supporting executive duties, and ensuring the company has adequate, well-managed resources its disposal. Many critical decisions are recorded in board meeting minutes as corporate resolutions.

  1. Whitewash Resolution

    Whitewash resolution refers to a resolution that must be passed ...
  2. Corporate Governance

    Corporate governance is the system of rules, practices and processes ...
  3. Bond Resolution

    1. A document used with government bonds, especially general ...
  4. Resolution Funding Corporation ...

    A mixed-ownership government corporation established by Congress ...
  5. Accelerated Resolution Program ...

    A program designed to reduce the time and cost of resolving failed ...
  6. Corporation

    A legal entity that is separate and distinct from its owners. ...
Related Articles
  1. Personal Finance

    3 Financial Resolutions You Can Stick to

    Many people fail to keep their New Year's resolutions because they are too vague. Use these three modified resolutions to get your finances back on track.
  2. Financial Advisor

    New Year's Resolutions: How to Help Clients Adhere

    Clients setting new resolutions is one thing, but it can be hard to achieve financial goals for some people. Here's how advisors can help.
  3. Investing

    Fidelity Investments: Financial Resolutions Decline for 2018 as Stock Market Surges

    Given the stock market's strength, the number of financial New Year's resolutions is declining, according to Fidelity's annual survey.
  4. Investing

    Fidelity: Diversification Should Be Top Focus in 2018

    Fidelity Investments says that diversification should be a focus in 2018.
  5. Managing Wealth

    Retired execs: How much do corporate boards pay?

    If you have the right skill set, getting a seat on a company board can be a lucrative and stimulating way to spend some of your new free time.
  6. Personal Finance

    How to Set and Achieve Your Goals the SMART Way

    Forget New Year's resolutions that never stick, set SMART goals instead to be successful.
  7. Insights

    Europe Talks Tough on Brexit Deal in Leaked Documents

    The European Parliament wants its way on migrants, money, courts and, most importantly, time.
  8. Managing Wealth

    How To Become A Corporate Board Member

    We look at how corporate boards are constructed, and how investors can get involved.
  9. Investing

    E*TRADE: New Year's Resolutions Include Increasing Retirement Contributions, Adjusting Asset Allocations

    E*TRADE customers plan to save more for retirement, adjust their asset allocations and become more educated in the new year.
  10. Financial Advisor

    Fund Boards: What They Do and Why You Should Care

    Fund boards oversee management and operations of the fund on behalf of shareholders. Make sure you've got a board that will look out for you.
  1. How can investors influence the c-suite?

    Learn how investors can influence corporate management. Find out about methods that investors use to take control and some ... Read Answer >>
  2. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  3. What is the difference between a president and a CEO?

    In corporate governance and structure, the roles of both CEO and president often vary across firms. Read Answer >>
  4. What are the different groups involved in corporate governance?

    Learn about the challenges inherent to defining and executing corporate governance, and understand why different groups work ... Read Answer >>
  5. A Hostile Takeover vs. Friendly Takeover

    Learn about the difference between a hostile takeover and a friendly takeover, and understand how proxy fights and tender ... Read Answer >>
Hot Definitions
  1. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  2. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  3. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  4. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  5. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
  6. Leverage Ratio

    A leverage ratio is any one of several financial measurements that look at how much capital comes in the form of debt, or ...
Trading Center