A Canadian Directors’ Resolution is a formal written document by which the directors of a corporation authorize or approve a specific action without holding a physical board meeting. Under the Canada Business Corporations Act (R.S.C. 1985, c. C-44), s.117(1), a resolution in writing signed by all directors entitled to vote on that resolution at a meeting of directors is as valid and effective as if it had been passed at a duly called and constituted meeting. Most provincial Business Corporations Acts — including the Ontario Business Corporations Act (R.S.O. 1990, c. B.16, s.129), the British Columbia Business Corporations Act (S.B.C. 2002, c. 57, s.140), and the Alberta Business Corporations Act (R.S.A. 2000, c. B-9, s.116) — contain equivalent provisions.

Directors’ resolutions serve as the official corporate record of board decisions. Under Canadian corporate law, all powers of a corporation that are not required to be exercised by shareholders are exercised by the board of directors (CBCA s.102(1)). The resolution documents exactly what was authorized, when it was authorized, and which directors approved the action. This is critical because directors owe fiduciary duties under CBCA s.122 — they must act honestly and in good faith with a view to the best interests of the corporation, and the resolution creates the paper trail demonstrating that they fulfilled this duty.

The distinction between ordinary and special resolutions matters. An ordinary resolution requires a simple majority of votes cast, while a special resolution requires at least a two-thirds majority as defined in CBCA s.2(1). Special resolutions are required for fundamental changes — amending the articles of incorporation, changing the corporation’s name, or authorizing an amalgamation. Written resolutions in lieu of meetings must be signed by all directors entitled to vote, regardless of whether the resolution would only require a majority if passed at a meeting.

A Canadian Directors’ Resolution is needed for virtually every significant corporate action. Opening or changing banking relationships is the most common trigger — Canadian banks require a certified directors’ resolution authorizing specific individuals to sign cheques, operate accounts, and execute financial instruments before they will open or modify a corporate bank account. Appointing or removing officers (president, secretary, treasurer, CFO) requires a board resolution documenting the appointment, the officer’s authority, and compensation terms.

Resolutions are essential for authorizing contracts and transactions beyond the ordinary course of business — entering into a lease for new office space, acquiring another business, issuing new shares, declaring dividends, approving a significant capital expenditure, or authorizing borrowing from a bank. Lenders routinely require a certified copy of the directors’ resolution authorizing the corporation to enter into the loan agreement and granting specific officers the authority to sign on behalf of the corporation.

Directors’ resolutions are also required for corporate governance actions — approving the corporation’s annual financial statements, appointing the auditor (to be confirmed by shareholders), establishing committees of the board, adopting or amending bylaws (subject to shareholder confirmation under CBCA s.103(2)), and ratifying actions taken by officers between board meetings. For corporations with directors in multiple provinces or countries, written resolutions in lieu of meetings eliminate the logistical challenges of coordinating a formal board meeting while maintaining the legal validity of the decision.

A valid Canadian Directors’ Resolution must identify the corporation by its full legal name and federal or provincial incorporation number. State whether the corporation is incorporated under the CBCA or a provincial Business Corporations Act — this determines which statutory provisions govern the resolution’s validity. The resolution must be dated and must state that it is a resolution in writing in lieu of a meeting pursuant to the applicable statutory provision (CBCA s.117(1) or its provincial equivalent).

The operative clause — the resolution itself — must describe the action being authorized with sufficient specificity that there is no ambiguity about what the directors approved. For a banking resolution, identify the financial institution, the account type, and the authorized signatories with their signing authority limits. For a contract authorization, identify the contract, the counterparty, and the material terms. For an officer appointment, state the officer’s name, title, duties, and compensation.

Every director entitled to vote must sign the resolution — this is a critical requirement under CBCA s.117(1). Unlike a resolution passed at a meeting (which requires only a majority or two-thirds vote depending on the type), a written resolution in lieu of a meeting requires unanimous consent of all directors entitled to vote. If even one director refuses to sign, the resolution cannot be passed in writing and a formal meeting must be convened. Include a recital confirming that the directors have considered the best interests of the corporation in accordance with their fiduciary duties under CBCA s.122. The signed resolution must be filed in the corporation’s minute book alongside the articles of incorporation, bylaws, and share register as part of the permanent corporate records.