Board Resolution: Certificate of Amendment for a Stock Split

Summary

This is a template of board resolution for a stock split certificate of amendment for a public company. This template includes practical guidance, drafting notes, and an alternate clause. As a general matter, any corporate action affecting, or potentially affecting, shareholder rights should be put to a vote of the shareholders. However, stock splits are not dilutive of shareholder interests as the price of each share of stock should be exactly proportionate to the terms of the split. Accordingly, in the normal course, stock splits do not require shareholder approval. Nevertheless, counsel should carefully review the authorized share capital ceiling in the corporation's certificate of incorporation or bylaws. If, as a result of the stock split, the authorized share capital ceiling will be exceeded, then the stock split will require further shareholder approval to increase the corporation's authorized share capital. For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit. For a full listing of key content covering Board Resolutions for Private Company Corporate Governance, see Private Company Corporate Governance Board Resolutions Resource Kit. For more information, see Stock Split Checklist, Corporations, and Board of Directors State Law Survey.