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Guidelines for Business Resolutions

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Question: 
We are having a debate about business resolutions. Is a resolution required for each type of business (such as LLC, Corporation, Organization, etc) or just specific ones? Is it better to use a resolution provided by our bank or should we use one provided by the company itself?
Answer: 

I'm not certain I understand the question, but there are no specific statutory or regulatory requirements for resolutions at the federal level. Frankly, I find it hard to imagine that they would exist at the state level either.

What your bank requires in the way of resolutions is a function of your bank's business judgment and experience. I suggest that each entity provide you with a resolution that specifically describes the action they want to take; e.g. borrow money, open a safe deposit box, open a checking account, etc.

Standard resolutions for corporations, LLC's, and partnerships are not dramatically different from one another. Their primary distinction would be in the way they descibe the decision makers; e.g. board of directors, members, partners etc.

As a general rule, your bank would prefer that any document it receives would be on the bank's form. Presumably, it was reviewed by your legal counsel and says what you want it to say. Resolutions crafted by customers should be reviewed very carefully before acceptance.

First published on BankersOnline.com 9/5/11

First published on 09/05/2011

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