What is required to make resolutions effective?

What is required to make resolutions effective?

• A. Following statutory CO procedures for proposing and circulating written resolutions.
• B. Board approval is sufficient.
• C. Court approval is required.
• D. Written minutes of the meeting.

Answer: (A)

Resolutions become binding only when the formal process in the Company Ordinance for written resolutions is followed. If a company uses a written resolution in lieu of a meeting, you must propose it and circulate it to all directors (and obtain their written agreement) within the time and in the manner the statute requires. This procedure ensures everyone has a fair chance to consider the matter and gives the resolution legal effect. Merely getting the board to approve in some informal way isn’t enough for a written resolution, and court approval isn’t normally required for these internal decisions. Minutes record what happened, but they don’t by themselves create the resolution’s authority; the statute’s procedure does.

Resolutions become binding only when the formal process in the Company Ordinance for written resolutions is followed. If a company uses a written resolution in lieu of a meeting, you must propose it and circulate it to all directors (and obtain their written agreement) within the time and in the manner the statute requires. This procedure ensures everyone has a fair chance to consider the matter and gives the resolution legal effect. Merely getting the board to approve in some informal way isn’t enough for a written resolution, and court approval isn’t normally required for these internal decisions. Minutes record what happened, but they don’t by themselves create the resolution’s authority; the statute’s procedure does.