When you’re running a company, there are plenty of moments where you can’t (and shouldn’t) rely on “quick verbal approvals” or a casual message in a group chat.
In Australia, directors are expected to make key company decisions properly - and that usually means documenting them with a directors’ resolution (often called a board resolution).
If you’ve been searching for a directors resolution template Australia because you need to approve something quickly (like opening a bank account, entering a contract, appointing a director, issuing shares, or signing a lease), you’re definitely not alone. The good news is: once you understand the structure, drafting and using a directors’ resolution becomes a straightforward process.
Below, we’ll walk you through what a directors’ resolution is, when you need one, what to include, and how to make sure it’s compliant and useful in the real world - not just “technically drafted” but practically accepted by banks, counterparties and auditors.
What Is A Directors’ Resolution (And How Is It Different From A Shareholders’ Resolution)?
A directors’ resolution is a written record of a decision made by a company’s board of directors.
In a small business company, the “board” may be just one director - but you still document the decision the same way. This written record matters because it shows the decision was properly considered and approved by the people legally responsible for managing the company.
Directors’ Resolution vs Board Resolution
In everyday Australian business language, people often use these terms interchangeably:
- Directors’ resolution (the decision of the directors)
- Board resolution (a common label for the same thing)
So if you’re looking for a board resolution template Australia - you’re usually looking for the same document as a directors’ resolution template.
Directors’ Resolution vs Shareholders’ Resolution
This is the key distinction:
- Directors manage the company day-to-day and make operational and strategic decisions.
- Shareholders generally approve bigger “owner-level” decisions (like changing the company’s constitution, major share restructures, or removing directors in certain circumstances).
Many companies also rely on a Shareholders Agreement to clarify decision-making, voting thresholds, and what approvals are needed for certain actions.
As a practical rule: if a decision is within the directors’ powers under the Corporations Act 2001 (Cth) and the company’s governing documents, you document it with a directors’ resolution.
When Do You Need A Directors Resolution In Australia?
You might need a directors’ resolution more often than you think - especially if you’re a growing small business dealing with banks, investors, suppliers, landlords or regulators.
Here are common scenarios where a directors resolution template (Australia-focused) is useful.
Common Situations (Examples)
- Opening or changing a bank account: banks commonly request a directors’ resolution authorising account opening and nominated signatories.
- Entering into a major contract: where the counterparty wants evidence the company approved the deal.
- Buying or selling business assets: especially where there are significant dollar amounts or ongoing liabilities.
- Appointing or resigning directors: the process depends on your constitution and (sometimes) shareholder arrangements; in many companies, the board can appoint a director (for example, to fill a casual vacancy), but shareholder approval may be required in other cases.
- Issuing shares: directors often approve share issues, but this is still subject to the Corporations Act and your constitution/shareholders agreement (including any pre-emptive rights or required approvals).
- Declaring dividends: directors usually resolve to pay dividends if permitted and only if the company satisfies the statutory dividend test (including solvency-related requirements).
- Approving a loan: borrowing money, offering security, or approving a director loan arrangement.
- Execution of documents: authorising who can sign on behalf of the company, and how.
If you’re ever unsure whether a directors’ resolution is needed, a good “stress test” is to ask: Would I want written evidence of approval if this decision is questioned later (by a shareholder, auditor, regulator, or in a dispute)? If the answer is yes, document it.
Also, if your company has a Company Constitution, check it - it often sets out rules about board meetings, voting thresholds, and how directors’ resolutions can be passed.
What Should A Directors Resolution Template (Australia) Include?
A strong directors resolution template Australia businesses can reuse should be:
- clear enough that a third party (like a bank) understands what was approved, and
- formal enough that it meets governance requirements and can be relied on later.
While the content changes depending on the decision, most directors’ resolutions share a common structure.
Key Elements To Include
- Company details: full legal name and ACN.
- Type of document: “Directors’ Resolution” or “Circular Resolution of Directors”.
- Date: the date the resolution is passed (and if relevant, the effective date).
- Directors voting: list the directors who are approving the resolution.
- Background / recitals (optional but helpful): a short explanation of why the resolution is being made.
- The resolution wording: the actual approval(s) in plain language, including any authority granted.
- Execution block: signature lines for each director.
Drafting Tips For The Resolution Wording
This is where many templates fall down - they’re either too vague to be useful or so complicated they create confusion.
In most small business contexts, you want the wording to answer:
- What is being approved?
- Who is authorised to do it? (e.g. a specific director, any director, or a named officer)
- Are there limits? (e.g. up to a maximum dollar amount, or subject to certain conditions)
- Does the board ratify anything already done? (useful where action was taken urgently)
If the decision involves executing a contract, it can help to refer to:
- the contract name
- the parties
- the date (or “in substantially the form presented to the directors”)
And if execution is involved, it’s important you understand how companies can sign documents, including execution under section 127 of the Corporations Act - the rules can affect whether your contract is enforceable and whether the other party can rely on the signature. (This comes up constantly in transactions and banking.)
For a deeper explanation of signing mechanics, the principles in section 127 execution are worth understanding when you’re authorising signatories.
How To Pass A Directors’ Resolution: Meeting vs Circular Resolution
In Australia, directors can generally make decisions in two main ways:
- at a directors’ meeting, or
- by a circular resolution (a written resolution signed by directors).
What you can use (and the exact rules) depends on your constitution and any shareholder arrangements. It can also depend on whether your company is using the replaceable rules under the Corporations Act.
Option 1: Directors’ Meeting (Minutes + Resolution)
At a meeting, directors discuss and vote. The decision is documented in minutes, usually including the exact wording of the resolution passed.
This can be a good approach when:
- the decision is sensitive or complex,
- there’s disagreement or a need for detailed discussion, or
- you want a clear record showing the directors considered risks and conflicts.
Option 2: Circular Resolution (Most Common For Small Businesses)
A circular directors’ resolution is often the simplest and fastest route for small business owners, especially where:
- all directors agree, and
- you need something in writing for a third party (like a bank or landlord).
Typically, each director signs the same resolution document (or signs counterparts, depending on your governing rules).
Just be careful: under the Corporations Act replaceable rules, a written directors’ resolution generally needs to be signed by all directors who are entitled to vote on it (in other words, it’s effectively unanimous) unless your constitution provides another method. By contrast, decisions at a meeting may be able to be passed by a majority (again, depending on your constitution and the rules that apply).
Do You Need A “Director Resolution Template” If You’re The Only Director?
Yes - and it’s often even more important.
When you’re a sole director, there’s no “board meeting culture” to keep record-keeping on track. Using a consistent director resolution template helps you:
- keep clean company records,
- avoid disputes later (especially if you add shareholders/investors), and
- show banks and counterparties that decisions were properly authorised.
How To Draft A Compliant Directors Resolution Template (Step-By-Step)
If you want a directors resolution template Australia businesses can reuse across different decisions, it helps to think of it as a “shell” you can adapt.
Here’s a practical drafting process you can follow.
1. Confirm The Company Details
Use the company’s exact legal name and ACN. Don’t rely on a trading name.
2. Check Who Must Approve The Decision
Before you draft:
- check your constitution and any shareholders agreement for approval thresholds,
- check whether shareholders approval is also required for the same action, and
- check for any director conflicts of interest (including whether the conflicted director can vote and what disclosure/recording is required).
3. Write The Resolution In Plain English
Most small business resolutions can be written clearly without legal jargon.
For example, rather than writing:
“Resolved that the Company hereby authorises and empowers…”
you can usually write:
“The directors approve the Company entering into with and authorise to sign and do anything necessary to complete it.”
The aim is for the resolution to be understandable six months later - including by someone who wasn’t involved in the day-to-day details.
4. Include Authority To Sign (If Relevant)
If the resolution relates to a contract, lease, finance document, or bank account, include a clear authorisation:
- who can sign, and
- whether they can sign alone or must sign jointly with someone else.
This often overlaps with your broader contracting approach. If you’re regularly entering customer or supplier arrangements, it can also be worth having consistent contract foundations in place (for example, properly drafted Contract Drafting rather than relying on informal emails).
5. Add A Signature Block For Each Director
Leave enough space for each director to sign and date.
If you’re signing digitally, make sure the method you’re using is reliable and can be stored properly (for example, a signed PDF). If documents are being initialled across pages, do it consistently - and keep the final executed copy.
6. Store It In Your Company Records
This step is often overlooked, but it’s what makes the whole process worthwhile.
Store directors’ resolutions in a safe, central location (physically or digitally), alongside:
- your constitution
- share registers and share certificates
- minutes of meetings
- key contracts and approvals
Good record-keeping isn’t just “admin” - it can materially reduce stress and legal risk when you:
- sell the business,
- bring on investors,
- apply for finance, or
- deal with internal disputes.
Common Mistakes With Directors Resolutions (And How To Avoid Them)
Using a directors resolution template (Australia) is a great starting point, but the details still matter. Here are issues we commonly see small businesses run into.
Mistake 1: The Resolution Is Too Vague
If your resolution says something like “approve entering into a contract” without naming the contract, the counterparty may reject it - and it may not protect you if the decision is later questioned.
Fix: name the agreement, the parties, and what authority is being granted.
Mistake 2: The Wrong People Approve It
If a matter requires shareholder approval (or requires a particular majority), but you only document a directors’ resolution, you may have a governance problem.
Fix: confirm whether this is a directors’ decision, a shareholders’ decision, or both.
Mistake 3: Conflicts Aren’t Managed
If a director has a personal interest in the transaction (for example, the company is renting a property owned by the director), you need to handle that properly.
Fix: identify the conflict early, make any required disclosures, and document how it’s managed (including whether that director abstains from voting, if required by the Corporations Act or your constitution).
Mistake 4: Execution Doesn’t Match The Authorisation
Sometimes a resolution authorises “any director” to sign, but the contract is then signed by someone else, or signed in a way that doesn’t align with how the company intended to execute.
Fix: align the authorisation with the signing process and keep the final signed version with the resolution.
Mistake 5: No One Can Find The Records Later
A resolution that can’t be located is almost as bad as not having one - particularly during due diligence, finance applications, or disputes.
Fix: keep a dedicated “Company Resolutions” folder and use consistent naming (date + topic).
If you’re looking for a ready starting point that you can tailor to your company’s needs, a Directors Resolution Template can help you set the structure correctly from the beginning.
Key Takeaways
- A directors’ resolution (board resolution) is a written record of a company decision made by directors, and it’s often required by banks, counterparties and for clean internal governance.
- A directors resolution template Australia businesses use should include company details, the date, the decision wording, director approvals, and signature blocks.
- You can pass directors’ resolutions at a meeting (documented in minutes) or via a circular resolution, depending on your constitution and approval rules (and note that written directors’ resolutions commonly require all eligible directors to sign unless your constitution allows otherwise).
- To keep resolutions compliant and practical, make the wording specific: identify the transaction, the parties, and who is authorised to sign and act.
- Common pitfalls include vague resolutions, using the wrong approval process (directors vs shareholders), and poor record-keeping - all of which can create problems later when you seek funding, sell, or face disputes.
If you’d like help preparing a directors resolution template for your company (or reviewing whether the resolution matches your constitution and signing requirements), you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
