Last updated: November 30, 2022

A Limited Liability Company (LLC) is a business structure that many choose to limit their liability. LLC resolution is a legal document that helps to protect your business.

An LLC, or limited liability company, is a US-based corporate structure that has become popular over the last few years.

This form of business structure offers many legal advantages while still protecting the personal assets of the company's owners from liabilities incurred while operating the business.

An LLC resolution is simply an officially-published document that sets rules for the sole proprietorship or company.

The LLC resolution provides regulations and guidelines on how to run the business smoothly without wavering from any of its fundamental principles.

Why Do I Need an LLC Resolution?

A discussion about why is an LLC resolution needed

Having an LLC resolution is beneficial to you in many legal ways.

Having an LLC resolution will also reduce confusion among your teammates because everyone knows what is expected of them, what legal guidelines are to be followed, and all legal procedures that define the company.

A written record of legal procedures in your LLC resolution will also help you in court if there is some legal dispute among board members or between shareholders and directors.

It enables you to prove your point because it clearly states the legal procedure for following through with legal issues without confusion.

Furthermore, a legal document written and signed by all legal entities will also help everyone know their legal rights and have legal consequences for breaking legal procedures.

In short, having an LLC resolution is beneficial because it helps you as a legal entity to protect your interests both as a board member and shareholder.

When Is an LLC Resolution Used?

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LLC resolutions are essential when an important decision needs to be made within the LLC; these decisions may carry significant financial risk.

If a company seeks funding or wants to open a bank account, it is vital to have an LLC resolution in place.

One example of using an LLC resolution in action would be signing a business loan.

Having written resolutions makes processes more efficient within an LLC, but it also prevents disputes between members over who has the authority to do what.

LLC resolutions are used in circumstances that entail financial risk and when buying or selling real estate, filing patents, and adding or removing company members.

All LLC owners should have an LLC resolution in place, especially to avoid potential disagreements among themselves or with banks and other business entities regularly.

What Should LLC Members’ Resolution Include?

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LLC members' resolution is an agreement that must be included in the company's official documents.

It is a document that conveys the votes or consent of company members.

LLC members' resolutions should include several things. First, it should consist of the list of LLC members and whether or not they support the proposal.

If a member does not support the proposal, their reason why must be cited in the minutes.

In addition to this, any other information will help show what was being discussed and how it should be dealt with.

An LLC resolution is a document that outlines rules and guidelines for an LLC.

The LLC resolution should include the following: has made, This is because the - Name of the company and organizer's name

Who Has the Authority to Make Resolutions?

Any LLC member can propose a resolution, but all LLC members must approve it.

For this resolution to pass, it must receive a majority vote.

If the resolution received a majority vote, those who did not vote in favor of it had no choice but to obey it, even if they did not vote on it.

The article of the organization must be filed with the secretary of state.

How Do I Pass a Resolution?

Shaking hands to someone while holding a clipboard folder

First, ask yourself what you want to accomplish through passing this resolution. What is your proposal?

Usually, you will propose to adopt or amend a particular document, such as the company's articles of organization or your operating agreement.

What do you need to get started? Some resolutions will require more work than others.

For example, if you want to amend your bylaws (your LLCs internal rules and regulations), there is no template for this, so you must draft it yourself.

If you want to adopt a new document, such as your operating agreement or your member's rights and responsibilities agreement, you have a template available to use.

If the resolution requires a formal vote, draft a plan for the meeting where it will be voted on.

Give staff sufficient time to read over all documents involved in the change so they can clearly explain the proposal to members.

Remember that a formal vote is required for all minor changes, so your proposal will need to be sent out with a notice of meeting 30 days before being voted on.

The agenda should include a description of what is being changed and why and how many people must be present at the meeting to pass the proposal.

Once you are sure that there are no mistakes in any documents, schedule your meeting and send notice to all members in good standing at least ten days before the meeting takes place.

Be aware of your state's laws on how much notice must be given for a member-only meeting.

Single Member vs. Multiple Member Resolutions

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One common question among newly minted entrepreneurs who are establishing their first LLC concerns the number of members in an LLC.

Should your business be a single member or multi-member LLC?

This article will help you understand the difference between these two types of LLCs.

Single Member LLC

Writing a signature on a document

One of the most common forms of an LLC is the single-member LLC, which is a sole proprietorship that has elected to be taxed as an entity separate from its owner.

Single-member LLCs are taxed under the same self-employment rules as sole proprietorships.

This means that the income of a single-member LLC is included on its owner's 1040 tax return, and all expenses are claimed against it.

The primary benefit of this method is that there are no separate books, records, or accounting necessary.

Single-member LLCs can also create problems when it comes time for the dissolution of the company.

Since there is only one owner, any debts and liabilities must be personally guaranteed by the owner or otherwise satisfied out of that owner's personal assets.

On the other hand, multi-member LLCs can rest easy knowing that each owner is only liable for his pro-rata portion of the debts, thus ensuring that no personal assets are used to pay off company liabilities.

There are several other benefits to single-member LLCs, including:

  • Freedom from signing personal guarantees
  • Ability to provide better asset protection.

Multiple Member LLC

Close up image of workers busy compiling files

A multiple-member LLC is an LLC with more than one member.

The members of a multiple-member LLC are entitled to share equally in the company's profits, losses, and draws.

All states allow at least two individuals to form an LLC. Each state allows for different numbers of members on their LLCs (i.e., two members, three members, and so on).

There is no maximum number of multiple-member LLCs that can exist.

LLC Member Resolution Template

Shaking hands to someone as a sign of agreement

A resolution template is used to construct a resolution so that all the LLC members agree with it.

The first thing a member resolution template does is provide the LLC with a means of creating an official record of any changes made to the articles of organization or bylaws.

The second thing that a member resolution template does is provide the LLC with an official record of any votes or board decisions made by members.

The templates are essential to avoid omitting any necessary information and arrange it more appropriately.

Many people use the LLC Resolution template, and you can also use one since it is available anywhere online.


Is a Resolution a Legal Document?

A resolution is a form of legal document.

What Is the Purpose of Resolution?

The purpose of the resolution is to provide the LLC with an official record of any changes made to the articles of organization or bylaws.

Is a Resolution the Same as an Operating Agreement?

Is a Resolution the Same as an Operating Agreement?

Is a Resolution the Same as an Operating Agreement?

A bylaw is a supplement to the articles of organizations that create rules and regulations for the LLC.

A resolution is a supplemental document used in determining voting concerns and documenting the results of votes and other decisions made by LLC members.

Are Resolutions Legally Binding?

Yes, resolutions are legally binding.

LLC Resolution: What You Need to Know

Finally, an LLC Resolution is an essential document that can help you defend your company in various ways.

Making an LLC Resolution is strongly advised to protect both your business and your personal assets. It's also critical to organize your business as a whole.

This business structure does, in fact, provide numerous legal benefits.

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