What Is a Corporate Bank Resolution?

A corporate bank resolution serves as a formal document businesses use to authorize specific banking activities. It establishes legitimate authority for individuals to act on the corporation’s behalf in financial matters. It functions as a foundational record, ensuring clarity and legal compliance in business banking relationships.

Understanding Corporate Bank Resolutions

A corporate bank resolution is a formal document, typically a board resolution, that grants specific individuals the authority to manage banking matters for a corporation. Its legal purpose is to confirm to banks that any person conducting transactions or managing accounts on behalf of the business is properly empowered to do so. This helps to prevent unauthorized financial activities and protects both the business and the bank.

The resolution usually includes the corporation’s legal name and registered address. It also specifies the name of the bank and the types of accounts involved, such as checking, savings, or credit lines. A listing of the names and titles of all authorized signatories is provided, detailing the scope of their authority. This scope can include opening or closing accounts, making deposits and withdrawals, signing checks, and executing loan documents.

Process for Adoption and Formalization

The process for adopting a corporate bank resolution begins with drafting the document, often prepared by legal counsel or the corporate secretary. This draft is then presented to the board of directors for review and discussion. The board formally votes on the resolution, and its approval is recorded in the corporation’s official meeting minutes. This ensures a clear record of the decision.

Following board approval, a corporate officer, such as the corporate secretary, certifies the resolution. This certification confirms that the resolution is an accurate reflection of the board’s decision and that it remains in effect. A certified copy of this formal document is then submitted to the bank.

Common Scenarios Requiring a Resolution

Banks generally require a corporate bank resolution in several common situations to ensure proper authorization:

• When a business opens a new bank account, verifying the individual initiating the account is authorized to act on the company’s behalf.
• When adding or removing authorized signatories from an existing account, ensuring only approved individuals can access or manage funds.
• When applying for business loans or lines of credit, confirming the corporation’s official approval for borrowing and designating who can execute related financial agreements.
• For changes to the corporate name or structure that impact banking relationships, such as a merger or acquisition.
• When establishing new banking services, like merchant services or specialized online banking access for specific employees, to define the scope of authority granted.