Why Do You Need a Board Resolution for? and How to Make It?

Colombo, Sri Lanka

In the dynamic world of business, making pivotal decisions is a routine part of a board of directors’ responsibilities. However, formalizing these decisions through a board resolution is crucial for legal compliance and maintaining a clear record of actions taken. Here’s why you should consider professional assistance for drafting your board resolutions.

The Importance of Board Resolutions

A board resolution is more than just a document; it’s a legally binding record that captures significant decisions made by your board of directors. Whether it’s a financial decision, a change in procedures, or an alteration in governance authority, a well-drafted board resolution ensures that these critical decisions are documented and compliant with legal standards.

When Are Board Resolutions Required?

Board resolutions are typically necessary for actions with substantial financial implications, procedural changes, or shifts in governance authority. They serve as an official record, providing evidence of the board’s decisions on crucial company matters. This documentation is essential for transparency and accountability within your organization.

How to Draft a Board Resolution

Drafting a board resolution involves several key steps:

1. Date, Time, and Location: Clearly state when and where the meeting took place.
2. Title: Provide a concise title that describes the decision.
3. Decision Statement: Indicate whether the decision was unanimous or by majority.
4. Resolution Details: Outline the decision and any necessary actions.

For ordinary resolutions, approval from the board of directors or shareholders is sufficient. However, special resolutions often require legal and regulatory approvals, making the drafting process more complex.

The Role of the Company Secretary

Typically, the board secretary is responsible for writing board resolutions. However, any board member or trustee can undertake this task. The key is to keep the resolution clear and straightforward, focusing on the essential details.

Steps for Writing a Resolution

Here’s a streamlined process for drafting a board resolution:

1. Date and Resolution Number: Start with the date and a unique resolution number.
2. Title: Create a title that reflects the decision.
3. Formal Language: Use formal language, starting each paragraph with “Whereas.”
4. Critical Statements: Write out each important point in separate paragraphs.
5. Final Resolution: Conclude with the final action the board will take.
6. Board Members’ Votes: List the names of board members and their votes.
7. President’s Signature: Ensure the resolution is signed and dated by the board president.

Why Choose Us?

At Ananda Sirisena & Company (ASAC), we specialize in assisting Sri Lankan companies with their corporate secretarial needs. Our expertise ensures that your board resolutions are not only compliant but also meticulously drafted to reflect the board’s decisions accurately.

Ready to streamline your board resolution process? Contact us today to schedule a consultation. Let us help you draft precise and legally sound board resolutions that stand up to scrutiny and support your company’s governance.