A “resolution” is a written record of an LLC’s decision, signed by the company’s members or administrators. Written resolutions are a significant technique of recording the activity of the company and should be used for all key corporate decisions and all transactions involving members (for example, loans to or from members or the like).
Table of Contents
Introduction and title
A resolution’s title tells the reader what the document is about. It might be as basic as “Member Resolution” or as explicit as “Member Banking Resolution” or “Resolution to Purchase 123 Main Street.” Following the title is an introductory paragraph that states that the document is a resolution of the specified LLC, the date it was approved, and that it was adopted in accordance with the company’s Operating Agreement.
Recitals
The next portion of a resolution is optional and is often referred to as the “Recitals.” In this context, a “recital” provides background information regarding the topic of the resolution as well as the reasoning for the judgments that will be made later in the resolution. These recitals may, but do not have to, begin with the phrase “Whereas,” as in “Whereas, the Company has concluded that X will benefit it because…
Resolutions
The document’s “Resolutions” section provides the Company’s real decisions, as expressed by member votes. These resolutions may, but do not have to, begin with the term “Resolved,” as in “Resolved, the Company shall X…
Following the above-mentioned building purchase scenario, the Resolutions part of this resolution would look like this:
Signatures
At the end of the resolution, there is usually a statement about how the members voted and how their votes will be represented in the resolution. They might be represented by member signatures, in which case the resolution would read: “By positive votes marked as signatures below, a majority vote in the interest of LLC Units accepts the form and substance of this resolution, to be effective immediately.” The resolution might alternatively be designed such that each member checks a box, yes or no, to indicate their vote beside their signature. The members would then individually sign as LLC members.
