A board resolution is also referred to as a document addressing any decision which is reached by the corporation’s Board of Directors. One of the most practical exemplars of the said resolution is the appointment of a person who will sign documents on behalf of the company. This ensures that the individual possesses power of attorney to such signed contracts or any other documents involving money. Drafting a board resolution for authorized signatory may sounds simple, but it requires a high level of precision, attention and adherence to organizational structure. Therefore, in this section we will seek to explain the procedures of formulating the best board resolution for the signer authority delegation.
Such key elements as names of the present Board members, the statement of what exactly is authorized and what particular work or documents the person will be permitted to execute are essential when creating a board resolution for authorized signatories. This type of document helps to make sure that the resolution is achieved without causing any confusion as to the person who will be signing the documents and what his or her authority will encompass.
Essential Contents of a Board Resolution for Authorized Signatory Person
There are specific headings that must be present in the document for the assignment of signing authority as it resolves issues and legal binding. These are:
- Title and the Date: Confirm this document as a board resolution and provide the date when the resolution is being adopted.
- The Beginning and the Supporting Context: Set the background of the resolution including when and where the resolution was passed and the purpose of giving signing powers to the person.
- Resolution Statement: This is the main part of the paper. profess the name of the person to whom the respective signature authority is approved and his/her position in the organization stating the extent of power in endorsement. Elaborate on which document(s) or acts they are permitted to endorse or approve in the capacity of the corporation.
- Effective Date: State when the signatory authority will be activated and whether it is for a specific period or not.
- Signatures: The resolution should be endorsed by Board members who approved the resolution for the purpose of the legitimization of such decision.
Drafting a Clear and Concise Resolution
The most important point when drafting the resolution is clarity. Avoid legal pleading which may negate the main purpose of the document. The resolution should be composed of common words so that all known parties involved in the document can comprehend its contents. However, be clear on what the signatory shall have the power to avoid any ambiguity. For instance, the resolution could provide the person with authority to sign only on the financial papers or could provide wider powers to that person with respect to signing contracts on behalf of the company.
It is also important that such a clause be included stating that the resolution is passed in accordance with the company’s bylaws. This helps to ensure that the resolution is valid and conforms to the company’s internal governance requirements.
Finalizing the Board Resolution
Preparation of a board resolution for any authorized signatory entails issuing the resolution statement which includes scope of authority, documents for signing by the board members approvingly the resolution and others. Documentation of the resolution should be clear, lawful and consistent with company’s policies to enhance business operations. The absence of any margin of ambiguity in the drafted resolution enhances proper usage of the authority by the specified person in order to act for the organization without fear.