What is a Corporate Resolution?
A corporate resolution is a written legal document that is issued by the management of a business entity, documenting a binding decision made on behalf of the organization. A corporate resolution generally involves major decisions such as the changing of ownership structure, voting in of new board members, or the sale of company shares, or buying or selling assets. A corporate resolution is also generally used to authorize people to access corporate funds, sign checks and acquire loans on behalf of the corporation.
Why do I need corporate resolutions?
Since a business entity can't act on its own, a corporate resolution is necessary for an action to be taken on behalf the operations. This legal document will be required by a third party, such as a bank or another business entity, that the action contemplated has been approved and is authorized.
What are some examples of types of business resolutions?
A decision to add a partner to the business entity and the terms for the addition of the new partner.
A decision to change the operating agreement and accept the modification to the agreement.
A decision to change registered agents, corporate structure, and tax elections.
A decision to make annual distributions to members of capital.
A decision to enter into a major contract for services and who is legally authorized to bind the business.
A decision to buy or sell an asset.
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