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January 23, 2019

Corporate Resolution

Word of the day

Corporate Resolution

A summary of a specific action taken by the board of directors of a corporation normally recorded by the corporate secretary in the corporation’s minute book.

Lenders often request a certificate of resolution to verify that the corporate board has authorized the borrowing of money or the opening of an account. This is called a borrowing resolution and usually uses language similar to the following: “Upon motion duly made, seconded, and unanimously passed, the following resolution was adopted on the 5th day of October, 2012. Resolved that the Corporation hereby authorizes the borrowing of $250,000 from the Bank of Paradise to purchase a grocery store.” 

When a corporation is the seller of real property, the purchaser should request a resolution from the seller’s board of directors authorizing the sale and designating an authorized officer to sign the conveyance instrument. As a rule, if the corporation is selling most of its assets, a resolution of the shareholders to authorize the sale is also required.

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