Meaning
Written authorizations signed by the directors of a corporation allow the governing body to take official action without convening a formal meeting. These board consents require unanimous approval in many jurisdictions to validate decisions such as issuing shares or appointing officers. The boundary of this mechanism excludes actions where bylaws or local statutes mandate an in-person vote or a specific quorum presence.
It operates strictly within the limits defined by the corporate charter and the prevailing state laws, meaning any non-compliant execution invalidates the underlying corporate action.
Corporate Resolution
Signed records of director assent establish corporate actions when scheduling a formal assembly proves impractical. This document compiles individual signatures into a single corporate instrument. Executing board consents provides a structured method to maintain regulatory compliance while executing routine actions.
Evidentiary Value
Documents generated through this process establish a timeline for transactional due diligence. They prevent disputes over authorization. Lacking these records, a corporation struggles to prove its acts were authorized.
Transaction Risk
Neglecting to compile these signed instruments before closing an acquisition can lead to challenges regarding the validity of equity issuances. Such omissions delay transactions and expose the firm to litigation. A single missing signature can invalidate an entire series of corporate acts.
