A Board Resolution is a formal decision passed by a startup's board of directors, often required to authorize important actions like issuing new shares, approving a funding round, or other major strategic decisions. It serves as official documentation of the board’s consent, ensuring that all actions comply with governance rules and that shareholders are informed of key company developments.
Why are Board Resolutions important for startups?
Board Resolutions provide a clear, documented record of major decisions, ensuring that a startup’s actions are in line with its governance rules and protecting against potential legal disputes.
What types of actions require a Board Resolution?
Actions typically requiring a Board Resolution include issuing new shares, approving budgets, authorizing loans, entering into partnerships, or appointing executives.
How is a Board Resolution created?
A resolution is proposed during a board meeting, and once approved by a majority vote, it is recorded in the minutes. This document then becomes part of the company’s official records.
Who is responsible for approving a Board Resolution?
The board of directors is responsible, with each director voting on the proposed resolution. Majority approval is often required for the resolution to pass.
Is a Board Resolution legally binding?
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