What is a corporate resolution?

A corporate resolution is a formal decision made by the board of directors of a corporation. This decision is typically documented in writing and serves as an official record of the actions or decisions taken by the board. Resolutions can cover a wide range of issues, including the approval of corporate policies, financial matters, appointments of officers, and significant business transactions.

The importance of corporate resolutions lies in their ability to provide clear evidence of the board's decisions, which can be crucial for legal and operational purposes. These formalities help ensure that the corporation operates within its legal framework and maintains compliance with state laws and corporate governance standards.

In contrast, illegal decisions made by directors would not be considered a legitimate form of corporate resolution, as resolutions must comply with applicable laws. A suggestion for future meetings lacks the definitive nature of a formal resolution and does not carry the same weight in legal or operational contexts. An informal agreement among shareholders is also not synonymous with a corporate resolution, as it pertains to shareholder actions rather than those taken by the board of directors. Therefore, the correct understanding of a corporate resolution is that it is a formal decision made by the board of directors, which is essential for the governance and operation of the corporation.