Board Resolution for Authorizing Director to Sign Agreement: A Guide for Businesses

When it comes to signing agreements on behalf of a business, the authority to do so is typically vested in the board of directors. However, as businesses often face time constraints and administrative hurdles, the board may authorize one or more directors to sign certain agreements on behalf of the company. This authorization is often documented in a board resolution. In this article, we`ll discuss the importance of board resolutions in authorizing directors to sign agreements, and provide a step-by-step guide to drafting an effective resolution.

What is a board resolution?

A board resolution is a formal document that records decisions and actions taken by the board of directors of a company. Board resolutions are typically required for major decisions, such as the approval of financial statements, the issuance of shares, and the appointment of officers. Board resolutions are important because they provide a record of the company`s decision-making process, which can be useful in legal disputes or audits.

Why is a board resolution necessary to authorize a director to sign an agreement?

When a company enters into an agreement, the document must be executed by someone on behalf of the company. Typically, this is done by a director who has been authorized to act on behalf of the company. However, in order for the director to be authorized to sign the agreement, the board must pass a resolution to that effect. This is because the board is ultimately responsible for the actions of the company, and it needs to ensure that any agreements entered into are in the best interests of the company.

Steps to draft a board resolution for authorizing director to sign agreement:

Step 1: Identify the need for authorization

The first step in drafting a board resolution to authorize a director to sign an agreement is to identify the need for such authorization. This could be due to time constraints, geographical limitations, or administrative hurdles that prevent the board from signing the agreement itself.

Step 2: Determine the scope of authorization

Once the need for authorization has been identified, the board must determine the scope of the authorization. The resolution should specify which director(s) are authorized to sign the agreement, the type of agreement(s) that can be signed, and any limitations on the signing authority.

Step 3: Draft the resolution

The resolution should be drafted in a clear and concise manner. It should include the name of the company, the date of the resolution, and a statement of the board`s authority to pass the resolution. The resolution should also state the reason for the authorization and the scope of the authorization.

Step 4: Obtain board approval

The resolution should be presented to the board for approval. It should be accompanied by any necessary background information, such as copies of the agreement(s) to be signed, and any legal opinions. The board should review the resolution and either approve it or make any necessary changes.

Step 5: Sign and date the resolution

Once the board has approved the resolution, it should be signed and dated by the chairman of the board and the secretary. The resolution should be added to the company`s records and kept on file for future reference.


Board resolutions are an essential tool for businesses to authorize directors to sign agreements on behalf of the company. By following the steps outlined above, businesses can ensure that their resolutions are clear, concise, and legally enforceable. So, if your company needs to sign an agreement quickly, consider drafting a board resolution to authorize a director to do so. Doing so can save time, money, and administrative headaches in the long run.