Unlike corporations and other business entities, LLCs aren’t legally required to document certain business decisions. However, documenting decisions made between members can protect your LLC and help you avoid expensive disputes.
Since there aren’t any state or federal mandates in place for this procedure, there aren’t specific requirements for drafting an LLC resolution, which can be confusing for members.
This guide will teach you everything you need to know about LLC member resolutions so you can get on the same page with the rest of the LLC owners and formally document important decisions.
What Are LLC Member Resolutions?
LLC member resolutions are written documents describing decisions and actions taken by the members. The purpose of this documentation is to confirm and record that the members agreed on a decision, which helps avoid disputes and misunderstandings down the road.
Any LLC member can propose a new resolution, and it usually requires a majority vote to pass.
For example, if an LLC member wants to sell a piece of land owned by the company, they’d propose a resolution and formally document the vote by all members. Assuming the vote passed, the resolution would serve as a record if another member claimed the sale wasn’t properly approved.
The Basics of LLC Member Resolutions
Let’s take a closer look at the core components of LLC member resolutions. The following section … Read More