Understanding Banking Resolutions for LLCs: A Comprehensive Guide

A banking resolution for an LLC is a document that outlines the authority of the company's officers to manage its bank accounts and conduct financial transactions. It is a crucial document that helps prevent unauthorized transactions and ensures that the company's financial activities are conducted in a legitimate and transparent manner.

In the United States, LLCs are required to have a banking resolution in place to maintain a business bank account. This resolution must be signed by the LLC's members or managers and must specify the authority of the officers to manage the company's bank accounts.

The banking resolution typically includes the following information:

• The name and address of the LLC
• The name and title of the officers authorized to manage the bank accounts
• The specific authority granted to the officers, such as the ability to deposit, withdraw, and transfer funds
• The bank account numbers and types of accounts authorized
• The date and signature of the members or managers

There are several types of banking resolutions, including:

• General banking resolution: This type of resolution grants general authority to the officers to manage the bank accounts.
• Specific banking resolution: This type of resolution grants specific authority to the officers to manage the bank accounts, such as the ability to deposit or withdraw funds.
• Blanket banking resolution: This type of resolution grants blanket authority to the officers to manage the bank accounts, but with certain limitations.

It is essential to note that the banking resolution must be updated whenever there are changes to the LLC's officers or bank accounts. Failure to update the resolution can result in unauthorized transactions and potential legal issues.

When creating a banking resolution for an LLC, it is recommended to consult with a lawyer or accountant to ensure that the document meets the necessary requirements and complies with state laws. Additionally, the resolution should be kept on file with the LLC's business records and provided to the bank when opening a business bank account.

In summary, a banking resolution for an LLC is a critical document that outlines the authority of the company's officers to manage its bank accounts. It is essential to create a comprehensive banking resolution that meets the necessary requirements and complies with state laws to prevent unauthorized transactions and ensure the legitimacy of the company's financial activities.