Written board resolution: how to draft?
What is a board resolution?
A board resolution is a decision made by the board (management) of a legal entity. In a board resolution, for example, the board decides to take out a loan, set the budget, buy, rent or lease a registered property, etc. In the vast majority of cases, such a board resolution is made outside of a meeting. Decision-making outside a meeting is often more practical than making a decision in a meeting because the company is then not bound by the requirements that apply to a physical meeting (for example, a notice period).
When is a board resolution invalid?
A board resolution is voidable if it is contrary to the law, articles of association or a (board) regulation. In addition, a board resolution may be void if it is contrary (in content) to the law or articles of association.
For example, the law provides that within a multi-headed board, no director may be excluded from decision-making. Unless there is a conflict of interest (see conflict of interest of a director in this context). The company's articles of association often include resolutions that require prior shareholder approval.
Example board resolution
Board resolutions passed in writing have few substantive requirements and are in principle free of form. This means that there is no obligation to record the board resolution in a well-defined document. Nevertheless, a few formalities must always be complied with. For simple management decisions, we have a standard model that we provide free of charge. You can consult this model by clicking on this link. If necessary, the board decision may require approval (by the supervisory board, the general meeting of shareholders or another body) under the law or the articles of association. Therefore, the company's articles of association should always be checked.
Tailor-made board resolution
Do you need to draft a written board resolution, but do not know how to do this? Feel free to contact one of our specialists for a custom-made resolution or a free exploratory meeting. We will be happy to assist you.
