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Corporate management teams remain accountable to certain governing bodies, including a board of directors, in addition to shareholders. The board is made up of a team of outside executives who should have unbiased views on the direction of the business, while shareholders of course are supporting a company in hopes of sharing in future profits. Corporate resolutions are drafted when a board and investors are in agreement with major decisions made by the company's management. These documents could be in response to changing locations, working through a bankruptcy process, or obtaining financing for a major project, for instance.
A corporate resolution surrounding a change in a lease agreement could include a declaration of why a space may no longer be needed. If an agreement, such as a lease, is being transferred to another party, the details of that agreement are outlined in the relevant corporate resolutions. Typically, some witness, such as a corporate secretary who is not involved with the decision or approval process for the event, is identified in the legal form.
When a company receives the support of a board of directors to sell certain properties or assets, it may create a corporate resolution. The document recognizes that the business has the necessary approval to follow through with the transaction, and any subsequent buyers of the properties may be named in the form. Corporate resolutions relating to the sale of property must also have some witness involved in the filing of the documents. In addition to the witness, top executives at the organization typically sign corporate resolutions too.
Throughout a bankruptcy process, a corporation must work to gain certain provisions from creditors if that business will ever return to solvency. Corporate resolutions may be used to outline the agreements that may have been made with creditors prior to or after a bankruptcy filing. Also, plans for the exit from bankruptcy protection could be included in these types of corporate resolutions.
If a business needs to obtain financing for some event, such as a project, expansion, or to purchase equipment, it may need to obtain debt financing. Corporate resolutions may be prepared declaring the approved parameters for any debt financing. For instance, if there are restrictions on the interest rate applied to the loan, or if the financing can be extended for another term in the future, these details are included in a corporate resolution document.
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