Resolution at Meeting

Meaning of Resolution:

A resolution is the final form of a decision taken at a meeting by voting on a motion, with or without amendment.

A Resolution must not be confused with a motion:

A motion is considered at a meeting, a resolution is the outcome of the discussion. A resolution is binding on the organisation. It becomes effective when it is passed but minutes make the evidence of such resolution. Sometimes there is a legal formality, as we find in the Companies Act, to file a copy of a resolution with some appropriate authority (e.g., the Registrar of Companies) to make it effective.

Rules Regarding Resolution:

Every association has to function guided by the resolutions adopted at the meetings at different levels—resolutions passed at general meetings, at executive meetings and at committee meetings, if any. In an Assembly or in Parliament proposed Bills are passed in the forms of resolutions which become the Acts subsequently. Therefore, the importance of resolutions is immense. Certain rules have to be strictly observed for passing resolutions.
They are:

• The drafting of a resolution has to be carried out with great care so that the purport or meaning of the resolution is easily and clearly understandable and there is no ambiguity (double meaning). The secretary, who is supposed to be an expert in the line, helps in the drafting process. The motion itself shall be drafted in such a manner that it can be adopted as a perfect resolution. This is particularly true for a formal resolution.
• There are different styles and forms of drafting a resolution. Any one style can be followed. It is desirable that a formal resolution is drafted in a specialized style.
• A resolution must be entered in the Minute Book in verbatim, i.e., word for word.
• Once a resolution is passed it cannot be revoked or cancelled either at the same meeting or at any subsequent meeting by passing another resolution.

What Kinds of Situations Call for a Board Resolution?

A board of directors can decide to write up a resolution for most any reason they choose. Think about it in terms of any decision that a board resolves to do. Resolutions can be written for the following reasons:

• To document that a new member of the board was voted in
• To record a decision made at a board meeting
• To document a decision made by the shareholders of a corporation
• When a company wants to hire new employees
• When a company wishes to sell shares in the corporation
• When a non-profit organization wants to delegate funds to a certain project
• When a government entity wants to honor someone.

Types of Resolutions:

Broadly speaking, resolutions are of two types:

1. Ordinary Resolution
2. Special Resolution

1. Ordinary Resolution:
   This type of resolution has the following characteristics:
   • This can be passed by a simple majority of votes and even by a margin of one vote. It can be passed (or lost) by the casting vote of the chairman.
   • This type of resolution is necessary to take decisions on ordinary matters of the association.
   • This is the most common type of resolution.
   • Formalities for passing such a resolution (unlike a special resolution) are not so strict.
2. Special Resolution:
   This type of resolution has the following characteristics:
   • It needs a specific margin of votes to be passed. For example—Two-thirds majority or three- fourths majority. Every association in its bye-laws mentions what shall be the margin. There may be statutory rules too. For example, the Companies Act states that there shall be three-fourths majority out of the members present (in person or by proxy) and voting. According to our Constitution, any Article of the Constitution can be altered by two-thirds majority of all the members of Parliament.
   • Such resolutions are necessary when any decision has to be taken affecting the very constitution of the organisation, e.g., altering the objects of the organisation
   • This type of resolution is not commonly necessary.
   • There may be strict formalities to be followed for the purpose (as found in the Companies Act).

Note: Concept of types of resolutions comes mostly from the Companies Act. There are various types of resolutions mentioned in the Companies Act, mainly applicable to member`s meetings.

How to Write a Resolution:

• Format the resolution by putting the date and resolution number at the top. If it’s the boards first resolution, you can number it whatever you want. Consider using something like 0001 and then giving all future resolutions a consecutive number.
• Form a title of the resolution that speaks to the issue that you want to document. For example, “Resolution to Designate Funds of the 2016 Gala Fundraiser to the Marketing Fund.”
• Use formal language in the body of the resolution, beginning each new paragraph with the word, whereas. The first sentence should reference the board’s responsibility. For example, “Whereas it is the responsibility of the Board to designate funds for a specific purpose.”
• Continue writing out each important statement of the resolution, beginning each paragraph with whereas.
• The last statement of the resolution should state the final resolution, which is the action that the board took. For example, “Now, therefore be it resolved to designate the funds of the 2016 Gala Fund raiser to the Marketing Fund.”
• The bottom of the resolution should list the names of the board members voting on the resolution and spaces adjacent to their names where they can indicate a “yes” or “no” vote. Obviously, the resolution is approved when the majority of the board members vote “yes.”
• There should also be a place for the board president to sign and date the resolution.