What Is an LLC Resolution? (All You Need to Know)

Delina Chantel Yasmeh
Published by Delina Chantel Yasmeh | Author
Last updated: February 23, 2024
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A Limited Liability Company resolution is a legal document that helps to protect your business.

As a business consultant specializing in limited liability companies, I have over a decade of experience helping clients understand LLC formation, resolution, and organization.

After researching and consulting our panel of LLC specialists, I'll provide you with all the pertinent information you need about LLC resolution.

Quick Summary

  • An LLC resolution is the official document that sets the rules for the operations of a company.
  • The advantages of an LLC gives clear guidelines on the role of each member of the company.
  • According to the latest data looking at the March 2022 status of businesses that opened in March 2021, 20.8% of private sector businesses in the U.S. fail within the first year.
  • My experience has shown that companies refer to resolution mostly when making important decisions.

What is an LLC Resolution?

An LLC resolution is a legal document that describes the roles members of an LLC should play. This document also highlights situations that which voting might be required.

For our company, the main objective of the resolution is to set clear guidelines that ensure smooth operations of the entity.

Why Do I Need an LLC Resolution?

A discussion about why is an LLC resolution needed

From my practical experience, you need an LLC resolution because it helps you as a legal entity to protect your interests both as a board member and shareholder.

About 1 in 5 U.S. businesses fail within their first year of operation, according to the latest data from the U.S. Bureau of Labor Statistics (BLS). Given there are 33.2 million small businesses across the country, it makes sense that a percentage of them will fail.

Here are other two reasons why an LLC resolution is important:

  • LLC member resolutions minimize confusion by clarifying expectations, legal guidelines, and company procedures.
  • Written resolutions serve as proof in court, clearly outlining legal processes for addressing issues.

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 essence, an LLC resolution is the formal acknowledgment of the company's intentions, binding its members or managers to specific actions or agreements."

- Jon Morgan, CEO, Co-Founder and Editor-in-Chief of Venture Smarter

When Is an LLC Resolution Used?

A group of women having a meeting

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

In our case, we used our resolution when our company was seeking funding and when we wanted to open a bank account.

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 a resolution in place, especially to avoid potential disagreements among themselves or with banks and other business entities regularly.

What Should LLC Members’ Resolution Include?

Workers smiling at the camera after discussion about the number of owners an llc can have

LLC members' resolution should include a written account of the acts taken by an entity during an official meeting. It is a document that conveys the votes or consent of company members.

LLC member resolutions should include several things. First, it should consist of the list of LLC members and whether they support the proposal.

For our LLC, two members did not support the proposal, so their reasons were cited in the minutes.

Other information that the resolution should have included the following:

  • Name of the company and organizer's name
  • Purpose of business
  • Terms and conditions of membership (if any)
  • Authority and duties of LLC manager(s) and member(s)
  • Rules

Who Has the Authority to Make Resolutions?

Any LLC member can resolve it, 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 an LLC Member Resolution?

Shaking hands to someone while holding a clipboard folder

Drawing from my practical experience, I've seen how one can pass an LLC member resolution by suggesting a proposal and securing a majority vote among the members.

Usually, you will propose to adopt or amend a particular document, such as the company's articles of organization or your operating agreement [1].

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.

Single Member vs. Multiple Member Resolutions

Busy workers inside an office

LLC resolutions come in the form of contracts, purchases, loans, and other pertinent business matters.

1. Single Member LLC

Writing a signature on a document

While it may seem unnecessary for a single-member LLC to file resolutions, the document may serve as a legal record to keep track of the entity's business operations and transactions.

Filing resolutions would formally document contracts, loans, purchases, or sales and may be essential for any legal action brought to the business entity.

2. Multi-Member LLC

Close up image of workers busy compiling files

Resolutions with multi-member LLCs have to be proposed, agreed on and voted unanimously by the members.

To illustrate, a member may suggest purchasing a property or allotting some of the company's funds for investment. A resolution is necessary to carry out the decision once all the members vote and agree to take action.

The Operating Agreement may be used as a guideline on how to undergo the process legally. Resolutions must be documented and filed to serve as an official record of the company's operations.


Is a Resolution a Legal Document?

A resolution is a legal document used to meet the record-keeping requirements of other states.

Is a Resolution the Same as an Operating Agreement?

A resolution is not the same as an operating agreement. A bylaw outlines the rules and regulations of the LLC, while a resolution documents the results of votes and other decisions made by members.

Are Resolutions Legally Binding?

Resolutions are legally binding documents needed for record-keeping. It provides courts, government agencies, and other institutions an insight into the LLC's operations.

Do All Members of an LLC Need to Agree on a Resolution?

All members of an LLC do not need to agree on a resolution if it is outlined in the operating agreement. The specific rules and voting thresholds regarding member resolutions should be clearly defined in these documents.


  1. https://www.sba.gov/blog/basic-information-about-operating-agreements

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