Board Resolutions and Their Importance


Board Resolutions and Their Importance

Is your corporation facing an important decision? If so, it is likely that a board resolution will be passed by the Board of Directors. A board resolution is an important document serving as a formal statement of the Board’s wishes.

The board resolution is usually found in the minutes book of the Company.

Board resolution may sometimes also be referred to as Director Resolution, or Company Board Resolution.

The Board of Directors of a company is responsible for deciding and making major commercial decisions for and on behalf of the Company. Some decisions passed in the form of Board Resolution are as follows:


  • Opening & operation of a bank account
  • Purchase of property for business use
  • Purchase of company’s motor vehicle
  • Application of banking facilities with the banks
  • Payment of dividends
  • Election of new members or Appointment of new director
  • Acceptance of the resignation of board members
  • Other business matters


Board Resolutions are important because they set out the guidelines that enable the Manager to effectively manage the day to day business of the association with the understanding of what is expected of them and the Board to know what process the manager is following.

Board Resolutions are easier to adopt than declarations or article of incorporation amendments. Resolutions generally are binding on all members of the company, so long as the resolution does not contradict the language of the company’s act or articles of incorporation.

Resolutions may change with a change in make-up of the Board (annual review after an election by new board members) or may need to change to be brought into compliance with local decrees or other outside influences.

There are generally two types of resolutions:

Administrative resolutions:

These will address the internal operation of the community association such as covenants violations and the process for handling them; collections of past due accounts from owners; a fining process, etc.

Policy Resolutions:

These will affect owners’ rights and obligations