Corporate Resolution

What is a corporate resolution?

Corporations have several requirements to be able to legally operate, like having a board of directors, submitting articles of incorporation, and filing corporate resolutions. Corporate resolutions provide a paper trail of major decisions that a company’s board of directors makes, such as: 

• Bringing on new board members
• Changing the executive management team
• Acquiring a company
• Filing, purchasing, or licensing a patent
• Modifying employee benefits
• Issuing or selling shares
• Choosing corporate headquarters

A corporate resolution in these and other instances not only helps companies stay legally compliant with state law but it also reduces liability and ensures proper recordkeeping. For instance, if a company is ever audited by the Internal Revenue Service, it may need to provide certain corporate resolutions.

Corporate resolutions are typically created during a board meeting, where board members vote on decisions, draft the legal document, then sign and file it with the corporate records, such as the company's articles of incorporation and other corporate governance paperwork. Drafting bylaws and resolutions is easy with LegalZoom.

FAQs 

Does every LLC have a corporate resolution?

Limited liability companies (LLCs) typically aren’t required to file corporate resolutions, but having them can come in handy in many situations, like applying for a business loan, opening a business bank account, making certain financial decisions, or documenting significant changes in membership, management, or profit distributions.

Who signs a corporate resolution?

A corporation’s board of directors—including the board president, corporate officers, and other board members—signs a corporate resolution. Then, the corporate secretary may provide their signature to certify the resolution before filing it in the company’s record book.

Do I need a corporate resolution to open a bank account?

Some businesses may need a corporate resolution to open a bank account, but it depends on the bank. A financial institution may request this documentation, sometimes called a corporate bank resolution, to ensure that the individuals opening the corporate bank account are authorized to do so—as well as authorized to close or adjust the account.

Is a corporate resolution the same as an operating agreement?

No, a corporate resolution is not the same as an operating agreement. An operating agreement is a founding document for LLCs, detailing basic business information, member or manager profit distributions, management structure and daily operations, tax structure, and processes for transfer of ownership or dissolution. Corporate resolutions serve as a way to document certain actions, especially those that deviate from what’s outlined in an LLC’s operating agreement.