Charlotte Corporate Resolution Attorneys
Keeping Your Business in Compliance
In the course of conducting business, your corporate company will need to make significant decisions. Decisions made by a corporation’s board of directors are called corporate resolutions. These decisions must be recorded in writing and maintained and maintained to remain in compliance with state and federal law.
To review, there are generally three types of participants in a corporation:
If board of directors hold company officers accountable, records of corporate resolutions ensure a board is behaving appropriately. Corporations have a fiduciary duty to serve the needs of their shareholders, and corporate resolutions help demonstrate this commitment should it be challenged.
Corporate resolutions also help maintain the corporate shield, also known as the “corporate veil,” between the entity owner and the corporation itself. Business owners are shielded from a majority of the liabilities of the corporation so long as the entity acts independently. A detailed record of corporate resolutions can prove the “shield” or “veil” between corporation and owner exists.
Our Charlotte corporate resolution lawyers at Oakhurst Legal Group can help you maintain thorough records of corporate resolutions that will stand up to the scrutiny of an audit or challenge. We are also capable of providing counsel to your corporate board of directors to ensure compliance with all state and federal regulations. Our team has experience handling many areas of business law, including supporting clients in the entertainment, finance, and construction industries.
Understanding When a Board of Directors Needs Corporate Resolutions
As its name would imply, corporate resolutions are only necessary for business entities that are set up as corporations. There are many subcategories of corporations, but two of the most common types, S corporations and C corporations, both require corporate resolutions.
Corporate resolutions are needed when a decision must be made that exceeds the responsibility and/or authority of the company officers. Consequently, most day-to-day business activities do not require a corporate resolution, as decisions involved in those tasks are made by the appointed officers. This can include hiring and terminating non-executive employees, selling products and services, making minor adjustments to business strategy, and paying company debts.
Corporate resolutions will generally reflect some significant shift in the business as agreed upon by the board of directors. The written resolution will serve as an official record or event and must follow the format required by the state in which the business is incorporated.
Examples of decisions and events that typically require a corporate resolution include:
These are only some of the most common resolutions. Our Charlotte corporate resolution attorneys can advise on what actions require corporate resolutions under state law.
What Is Included in a Corporate Resolution
A corporate resolution will need to be promptly written ahead of a formal vote. You can usually anticipate these occurrences, as most corporate boards will set agendas prior to meeting. The terms of the resolution will then be discussed, debated, and voted upon. Once the votes are recorded, the completed resolution can be signed and stored.
Writing a corporate resolution is not as simple as recording votes on a broad issue. Businesses incorporated in North Carolina will need to follow the format and guidelines specified by the state when drafting their resolutions.
Elements your corporate resolution will need include:
Additionally, a corporate resolution can potentially include an “intentions” statement. This seeks to describe the problem – for example, a vacancy in a corporate officer position – that justifies the action of the resolution statement.
Why Your Board Must Maintain Corporate Resolution Records
Once a corporate resolution has been ratified, it must be stored in the corporate records book. This is a private collection of documents that tracks every major decision your corporate board has made since the business’s inception.
Maintaining corporate records is required by state law. It should be noted that the records do not need to be a public document, and you are not required to regularly submit resolutions to any government entity. However, a corporation is required to turn over corporate records should a government agency, like the Internal Revenue Service (IRS), request them as part of an official audit. A corporation can face harsh penalties for failing to keep the appropriate records.
Our Charlotte corporate resolution lawyers understand that the need to create corporate resolutions for just about every board decision can be overwhelming and stressful. This is especially true for new corporations struggling to navigate their state’s sometimes-labyrinthine laws. Our team at Oakhurst Legal Group is prepared to assist you in the ongoing process of maintaining accurate, thorough corporate records. Whether you are a new growing business or a longstanding titan of industry, we are prepared to give you our attentive, personalized service and work with you long-term.