A banking resolution is the directors’ decision to open an account and their instructions on who may operate it: who can sign cheques and approve payments, alone or with someone else, and up to what amount.
Most banks give you their own form to sign, and in Canada the bank must keep a copy of the part of your corporate records that gives someone power over the account. Keep the resolution in your minute book as well, so the corporation has its own record of who it authorized.
- Approved by
- The directors
- Signed by
- Every director entitled to vote, if passed in writing
- Who gets a copy
- The bank, often on its own form, certified by an officer
- Filed with the government
- No
- Also needed
- ID for each signer, proof the corporation exists, and who owns 25% or more
When you need one
- Opening the corporation’s first bank account.
- Opening an account at a new bank, or a new kind of account: a US dollar account, an investment account or a merchant account.
- Setting up online banking with users who can approve payments.
- The bank asks for an updated resolution during a review.
- To add or remove someone on an existing account, see the signing authority resolution.
Who approves it
Opening a bank account is part of managing the business, which corporate statutes give to the directors. The directors can then authorize officers or employees to deal with the bank day to day.
| Jurisdiction | Rule |
|---|---|
| Canada, federal (CBCA) | Directors manage or supervise the management of the business (s. 102(1)) and may appoint officers and delegate powers to them (s. 121). |
| Ontario (OBCA) | Directors manage or supervise the management of the business (s. 115(1)); officers under s. 133. |
| British Columbia (BCBCA) | Directors manage or supervise the management of the business, subject to the articles (s. 136(1)); officers under s. 141. |
| Alberta (ABCA) | Directors manage or supervise the management of the business (s. 101(1)); officers under s. 121. |
| Quebec (QBCA) | The board exercises the powers needed to manage the business (s. 112) and appoints officers (s. 116). |
| Delaware (DGCL) | The business is managed by or under the direction of the board (s. 141(a)); officers have the duties set in the bylaws or a board resolution (s. 142(a)). |
| Model Act states (MBCA) | Corporate powers are exercised by or under the authority of the board (s. 8.01); officers under s. 8.40. |
Banks also have their own legal duties. In Canada, a bank must verify the corporation’s existence from its certificate of incorporation or a similar current record, get the names of its directors and of everyone who owns or controls 25% or more, and verify the identity of each person authorized to give instructions on the account. In the US, banks must identify each individual who owns 25% or more and one individual who controls the company. That is why the bank asks for more than the resolution.
Before you sign
- Ask the bank for its form. Most banks have their own resolution or certificate of authority and want it signed as is. Use it, and make the resolution in your minute book match it.
- Decide who signs and how: one signature or two, whether two are needed above a set amount, and who can approve online payments and wires.
- Use the exact legal name and, in Canada, the corporation number, as they appear on your articles or certificate of incorporation.
- Check your bylaws. Some already say who signs cheques and contracts; the resolution should not contradict them.
- Have ID ready for each signer and each person who owns 25% or more.
Sample wording
Adapt the wording to your corporation: replace everything in square brackets, and check your articles, bylaws and any shareholder agreement first. Each person signs and dates a copy, and a scanned or electronic signature is usually fine.
Resolutions of the directors of [Corporation name] (the “Corporation”)
BE IT RESOLVED THAT:
1. The Corporation open and maintain one or more accounts with [bank name] (the “Bank”).
2. Any [one / two] of the following, acting [alone / together], may sign cheques, approve payments and transfers, and give instructions to the Bank on behalf of the Corporation: [name, title]; [name, title].
3. [Name, title] is authorized to sign the Bank’s account agreements, its form of banking resolution and any other document the Bank requires to open and operate the accounts.
4. The Bank may rely on this resolution until it receives written notice that it has been changed or revoked.
The foregoing resolutions are passed by the signatures of all the directors of the Corporation, as of [date].
______________________________
[Name], director
______________________________
[Name], director
Action by unanimous written consent of the board of directors of [Corporation name] (the “Corporation”)
RESOLVED, that the Corporation open and maintain one or more deposit accounts with [bank name] (the “Bank”);
RESOLVED FURTHER, that any [one / two] of the following officers, acting [alone / together], are authorized to sign checks, approve payments and transfers, and give instructions to the Bank on behalf of the Corporation: [name, title]; [name, title];
RESOLVED FURTHER, that [name, title] is authorized to sign the Bank’s account agreements and certificate of authority, and the Secretary is authorized to certify these resolutions to the Bank; and
RESOLVED FURTHER, that the Bank may rely on these resolutions until it receives written notice of their amendment or revocation.
This consent is signed by all the directors of the Corporation, is effective as of [date], and will be filed with the minutes of the proceedings of the board.
______________________________
[Name], director
______________________________
[Name], director
Certificate of the [secretary] of [Corporation name] (the “Corporation”)
I, [name], the [secretary] of the Corporation, certify that:
1. Attached is a true and complete copy of a resolution of the directors of the Corporation passed on [date].
2. The resolution has not been amended or revoked and is in full force and effect.
3. The persons named in the resolution hold the offices shown beside their names.
Dated [date].
______________________________
[Name], secretary
Use the bank’s own certificate if it has one. In the US this is often called a secretary’s certificate.
After you sign
- Give the bank what it asks for: usually the signed resolution or its own form, a certified copy, the articles or certificate of incorporation, and ID for each signer and each 25% owner.
- Keep a current list of who can sign on each account, and update it as soon as it changes.
- When someone leaves, remove their authority right away with a signing authority resolution.
What to keep in your minute book
- The signed resolution, and a copy of the bank’s forms as delivered.
- The certified copy you gave the bank.
- A list of current signing authorities for every account.
Common questions
Do I need a banking resolution if I am the only director?
Yes, in practice. The bank needs written proof that the corporation authorized the account, and in Canada it must keep a copy of the corporate record that gives someone power over the account. A one-director corporation passes the resolution by having that director sign it.
Does the bank’s form replace the resolution?
For the bank, usually yes: it relies on its own form. For your own records, keep a resolution too, or at least a signed copy of the bank’s form in your minute book, so you can show who the corporation authorized and when.
Do I need a corporate seal?
No. The federal Canadian statute says a corporation may, but need not, adopt a seal, and a document isn’t invalid only because no seal is on it. Ontario says the same, and in Delaware a seal is a power, not a requirement. A bank may still have its own preferences.
Can someone who isn’t a director sign on the account?
Yes. The directors can give signing authority to an officer or employee, such as a bookkeeper who can approve payments up to a set amount. In Canada, the bank must verify the identity of every person authorized to give instructions on the account.
Why does the bank ask who owns the corporation?
Because it is required to. In Canada, anti-money-laundering rules require banks to get the names of everyone who owns or controls 25% or more of a corporation and confirm them. In the US, banks must identify each individual who owns 25% or more and one person who controls the company. Keeping your shareholder register current makes this easy.
This page is general information about corporate resolutions in the United States and Canada, not legal or tax advice. The sample wording is a starting point: your articles, bylaws and any shareholder agreement may require something different, and rules change over time. For advice about your corporation, speak with a qualified lawyer or accountant.
Sources
- Canada Business Corporations Act, sections 23, 102 and 121
- Ontario Business Corporations Act, sections 13, 115 and 133
- British Columbia Business Corporations Act, sections 136 and 141
- Alberta Business Corporations Act, sections 101 and 121
- Quebec Business Corporations Act, sections 112 and 116
- Delaware General Corporation Law, sections 122, 141 and 142
- Model Business Corporation Act (American Bar Association), sections 8.01 and 8.40
- Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, section 109 (verifying a corporation)
- Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, section 138 (beneficial ownership)
- FINTRAC: beneficial ownership requirements
- Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, section 12 (account records)
- 31 CFR 1010.230, beneficial ownership requirements for legal entity customers