Use a banking resolution to formally authorize opening a company bank account. Below are some helpful explanations of the key considerations when creating this document.
A banking resolution is a necessary business document for corporations, both for-profit and nonprofit. While resolutions for LLCs are not legally required, they may still be needed in order to document the company decisions. An LLC may adopt the forms and procedures of a corporation and use company resolutions to document and evidence its decisions in a more formal manner. This will be helpful for banks considering providing financing to the LLC or for the LLC's investors to obtain a transparent understanding of the company.
Enter the business' name exactly as it appears on your articles of incorporation or articles of organization filed, or to be filed, with the state.
Enter the name of the bank or other financial institution where the company is authorizing an account. Also add the names of all employees or company officers authorized to transact on the account. These individuals will be authorized to sign checks, make deposits, and otherwise engage with the bank on behalf of your company.
You will also specify whether or not the authorized individuals will be able to borrow money on the company's behalf. Companies often prefer to authorize borrowing money by a separate corporate resolution on a case-by-case basis as the need arises.
You may then add any additional related details or separate resolutions as needed.
A resolution can be passed by the shareholders, board of directors, members, or board of managers depending on the entity type. Select the decision-maker for this resolution as appropriate for your business.
Depending on your rules and procedures as outlined in the articles of incorporation, shareholder agreement, corporate bylaws, or LLC operating agreement, the decision-maker establishing this resolution may allow resolutions to be passed with or without a meeting. Select the option that describes how these resolutions are being adopted.
Enter the date that this banking resolution is adopted by the decision-makers. If the resolution was passed at a meeting that meets quorum, then the adoption date is probably the meeting date, unless otherwise specified. If the resolution was passed by written consent, then the adoption date may need to anticipate the time lapse that may occur until a sufficient number of necessary decision-makers have signed and returned their consent to pass a resolution.
The certificate included with your resolution is used to show that the resolution has been approved by one or more company officers such as the secretary, president, or other officers. Completing this certificate is optional if your bylaws or operating agreement does not require it. However, a certified resolution is useful if a bank or other external organization ever requires verification to permit specific actions or powers. If you need to add additional signatures, simply add those below the signature line.
As you complete your banking resolution you will need to provide certain relevant information, including the name of the financial institution and the names of those authorized to transact on the account.
Our questionnaire will help you customize your agreement for your company, providing step-by-step instructions. You may notice that the questions presented to you change depending on how you answer them.
Review your completed resolution in its entirety to ensure that it meets your needs and is free of errors. Note that you may make edits to the text of your document after downloading it in .docx format from your account dashboard and opening it in Microsoft Word or Google Docs.
While you do not need to sign the banking resolution, it must be formally adopted during a board meeting by the secretary or other authorized corporate officer.
After it has been adopted, store your banking resolution in your corporate records book. Also make an electronic backup copy of the signed banking resolution. Note that you should store the following documents in your records book:
Companies that have two or more shareholders need a shareholder agreement to clarify each shareholder’s rights and obligations. This agreement works in tandem with your articles of incorporation and provides additional shareholder protections. This goes a long way in preventing disputes from harming the company.
You will also need to document activities at board meetings with meeting minutes. This is where you record things like adopting the corporate bylaws or operating agreement, appointing officers, voting, and passing resolutions.
Finally, issue a stock certificate when shares are being transferred to shareholders. Shareholders keep their stock certificates as evidence of their ownership interests. Also, be sure to record all such transfers in a stock transfer ledger.