Board Consent: When Your Startup Needs One and How to Get It Right

A board consent is a written document in which your board of directors approves a corporate action without holding a meeting. For most startups, it is how almost every important decision gets made official: issuing stock, granting options, signing a financing, appointing officers.

It is also one of the documents most often missing when investors run diligence. This guide explains when you need a board consent, what goes in one, and how to fix approvals that were never documented.

This article is general information, not legal advice. Confirm the requirements for your company with your counsel.

Board consent vs a board meeting

Your board can approve actions in two ways:

• At a meeting, with a quorum present and a vote recorded in the minutes.
• By written consent, with no meeting at all. For Delaware corporations, Section 141(f) of the Delaware General Corporation Law allows this unless restricted by the charter or bylaws, but the consent must be unanimous: every director must sign. Electronic signatures count.

Early-stage boards use written consents for most decisions, because they are faster and leave a clean record. A meeting makes more sense when the board needs to discuss something, or when you cannot get every director to sign.

A board consent is different from a stockholder consent, which records approval by your shareholders. Some actions need both, such as amending your certificate of incorporation or approving a sale of the company.

What needs a board consent

These are the actions startups most often need board approval for:

Action	Why it needs approval
Issuing shares to founders, employees or investors	Stock is only validly issued when the board authorizes it
Adopting a stock option plan or increasing the pool	Sets the number of shares available for grants
Granting stock options	Each grant needs board approval, including the exercise price
Approving a 409A valuation for option pricing	Supports the exercise price set on grants
Signing SAFEs or convertible notes	Approves the issuance of convertible securities
Approving a priced financing	Approves the deal documents and the new share class
Appointing or removing officers	Confirms who can act for the company
Repurchasing shares	Required when buying back unvested stock from a departing holder
Amending the charter or bylaws	Board approval, usually followed by stockholder approval
Major contracts, loans or a sale of the company	Commitments outside the ordinary course

If you are unsure whether something needs board approval, check the charter, bylaws, existing delegations and applicable law with counsel before taking the action. Some actions may be authorized through a valid delegation.

What to include in a board consent

A standard written consent includes:

1. The company’s legal name and a title such as “Action by Unanimous Written Consent of the Board of Directors.”
2. The legal basis, for example a reference to Section 141(f) and your bylaws.
3. Recitals: short “Whereas” statements giving context.
4. Resolutions: what exactly the board approves, with specifics. For an option grant: the recipient, number of shares, exercise price, vesting schedule and vesting start date.
5. A general authorization allowing officers to sign the related documents.
6. Signature lines for every director, with the date each one signs.
7. An effective date.

Common board consent mistakes

• Not every director signed. A written consent without all signatures is not a valid unanimous consent.
• The consent was drafted but never signed. It sits in a folder as a Word file.
• Backdated consents. Writing in a past date to cover an action taken earlier creates more problems than it solves.
• Grants approved without a current 409A. The exercise price may be challenged.
• Vague resolutions. "Approve grants to employees" with no names, numbers or prices.
• Consents that cannot be found. Approved, signed, then lost in someone's inbox. See why your company documents live in too many places.

How to fix a missing approval

If you find shares or options that were issued without proper board approval, do not simply write a new consent with an old date. Delaware law provides formal ways to fix defective corporate acts, most commonly ratification under Section 204 of the DGCL. Ratification can require board and sometimes stockholder approval, and in some cases a filing with the state. Work through it with counsel, and do it before diligence starts rather than in the middle of it.

Why investors check every consent

In diligence, investors' counsel matches each issuance on your cap table to the board consent that approved it. A missing consent turns into a closing condition, a delay, or a lower valuation. We cover what they look for in governance due diligence and approval records.

Keep every signed consent in your minute book, alongside board meeting minutes, organized by date. Our cap table guide explains how those approvals connect to your ownership records.

Find missing approvals before investors do

DocChief reads your corporate documents and matches every issuance and grant to the board consent behind it. Missing signatures and unapproved issuances are flagged with a citation to the source page. See how it works.