The Board Approval of Common Stock Issuances is one of a group of documents that formally chronicles the approval of a “resolution” by your startup’s board of directors. A resolution is a decision or objective that has been voted on (and was agreed to) by your startup’s board members. The process of formal documentation is generally reserved for important or significant resolutions – examples of this sort are the approval of a Restricted Stock Award, and the issuance of stock options to a given individual. Many less-impactful decisions involving your startup will be discussed and voted on by board members (replacing a non-critical vendor or changing the appearance of your employees’ uniforms might qualify), however – while these should always be recorded – they do not require formal documentation.
The Board Approval of Common Stock Issuances contains authorization from your startup’s board of directors to issue shares of Common Stock to a list of purchaser(s) set forth in the document. The amount that each purchaser will pay and the vesting terms (if any) to which his or her shares will be subject are included in the document’s language. The Board Approval of Common Stock Issuances also gives officers of your startup authority to register for sale company securities in those states in which it is deemed appropriate. The form Board Approval of Common Stock Issuances is designed to go hand in hand with a completed Restricted Stock Purchase Agreement from each of the purchasees listed.