What Makes a Good Board Resolution?

The interpretation of a Resolution can be one of the more challenging areas as it is the initial document Citi would reference to understand who can open, close and manage bank accounts. In general, Citi looks at the Resolution to understand who has the authority to bind the company.

Powers

State the powers and authorities granted clearly and concisely to reflect who can authorize:

  • To open, close, and operate bank accounts
  • To appoint signers on accounts
  • To give instructions of any nature over the account
  • To make withdrawals or otherwise issue orders for payment
  • To enter into cash management arrangements
  • To sign bank agreements, and any and all bank documents
  • To perform other functions deemed necessary and related to the bank relationship
  • To appoint others to have the authority outlined above

Important: Ensure the authority document contains evidence of sub-delegation of authority from the subsidiary to the parent if the parent is opening the account on behalf of the subsidiary.

Who can Execute

State expressly "Who", "How" and "How Many"

  • Identify the officer titles or positions
  • Identify any signature arrangements, and which powers they apply to
  • Use "singly" or "any two"; careful of use of "and"

Rules of Construction

Common rules in most jurisdictions

  • Authority of a person can be express, implied or apparent
  • Interpretation can be strict (expressly stated) or liberal (implied)
  • If a list is provided, it can be either illustrative or exclusive
  • Without the designation of "singly" or "or" in a string of officer titles, the default reading is "all"
  • Drafting should be clear, direct, and unambiguous; not subject to interpretation

Bank name

Either the bank name should not be stated at all, or the bank name (if stated) should include "its branches, affiliates, or subsidiaries"

Templates

In some countries, Citi can provide sample resolution templates. Use of these templates, which have been drafted to cover banking needs, increases acceptance rates and may decrease processing time.

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