What Is an LLC Resolution?

By Tony Meier

Banks and other parties with which an LLC, or limited liability company, may do business may require an LLC resolution. This is because company actions outside of routine business often must have member or manager approval.

Definition

An LLC resolution documents the formal approval of an action by the members or the managers of the company.

When Needed

Unless the operating agreement for the LLC clearly gives authority to an individual to take a particular significant action on the LLC’s behalf, a resolution should be used to create or confirm that authority.

Member Resolutions

In a member-managed LLC, only a member resolution would be needed. Members in a manager-managed LLC will have the right to approve matters not delegated to the managers by the operating agreement.

Manager Resolutions

If the LLC has only one manager, the manager often can take an action (to the extent authorized by the operating agreement or the members) without a separate resolution. For example, the manager’s signature on a contract evidences the manager’s approval of the contract. LLC’s with multiple managers use resolutions to document a majority or other approval.

LLC Resolution Contents

LLC resolutions describe in writing what action the resolutions authorize, including appointing one or more individuals to sign documents or carry out other acts implementing the resolution. The required number of members or managers must sign the resolution.

About the Author

Based in Phoenix, Arizona, Tony Meier started writing in 1998. His first published article appeared in the “Arizona State Law Journal” while he was a law student. Meier is a member of the State Bar of Arizona. He holds a bachelor's degree in finance and a law degree from Arizona State University.

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