Delaware Corporate Resolution for Nonprofit Organizations
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FAQ
A corporate resolution is the legal document that provides the rules and framework as to how the board can act under various circumstances. Corporate resolutions provide a paper trail of the decisions made by the board and the executive management team.
They are only required when the board of directors makes a significant business decision. A corporate resolution creates a paper trail of an important decision in case it ever needs to be reviewed by shareholders, officers, or the IRS.
Your board of directors is the primary decision maker for your nonprofit and is responsible for overseeing its management. As a result, your board should approve any decision involving significant financial, legal, or tax issues, or any major program-related matter.
A corporate resolution is the document commonly used for this purpose. The resolution is generally drafted after a meeting and vote by the directors on an important issue for the corporation.
Both Texas and Delaware require every corporation to have Bylaws. You do not need to publicly file the Bylaws in either state, but you must create, retain, and follow them.
Nonprofit corporations often deal with government agencies on issues of public concern, which may involve applying for grants, loans or other governmental approvals. In many situations, the government agency requires a corporate resolution to verify the board's approval for making the government application.
Labeling a vote a resolution means that the board believed the issue was important enough to separate it from standard voting issues. A resolution is considered an official board action and it requires a quorum. Board directors must document all official board actions, including resolutions, in their meeting minutes.
Labeling a vote a resolution means that the board believed the issue was important enough to separate it from standard voting issues. A resolution is considered an official board action and it requires a quorum. Board directors must document all official board actions, including resolutions, in their meeting minutes.
In general, the SEC guidelines permit resolutions only from shareholders who have continuously held at least $2,000 of the company's stock for a year or longer. If a shareholder meets these requirements, then the board can choose to bring up the resolution for a vote at the next shareholder meeting.
A resolution can be made by a corporation's board of directors, shareholders on behalf of a corporation, a non-profit board of directors, or a government entity. The length of the resolution isn't important. It only needs to be as long as what you need to say.
