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At the first meeting of the members (for an LLC) or the Board of Directors (for a corporation) establishing a company, a corporate resolution about banking details is often included.
Although a company may agree on several different types of corporate resolutions during the meeting, the banking resolution is often the most commonly extracted resolution from the general minutes of the meeting.
The banking resolution can be agreed upon at any meeting after the first meeting, or altered, as directed, by the members or the Board of Directors.
The banking resolution document is drafted and adopted by a company’s members or Board of Directors to define the relationship, responsibilities and privileges that the members or directors maintain with respect to the company’s banking needs.
To authenticate it as a stand-alone document, it is signed by the corporate secretary and stamped with the corporation's corporate seal.
This document will often specify who may sign checks, borrow money or make banking decisions. It also typically states the date and location of the meeting in which the resolution was adopted.
The members, or the Board, and the corporate secretary sign off on any changes made to this document going forward.
This document is typically not required to be filed with your Registered Agent or your state of formation. It is provided to the bank and then held internally within the company.
When opening a business bank account, the bank may often require a banking resolution. If you need a banking resolution template, you can download and print a free LLC banking resolution template or corporation banking resolution template now.
If you have banking resolutions on file with the bank for a bank account or loan, be sure to update the bank on any changes within the company. The bank sometimes requires a new and original resolution when the Board or officers change or when renewing a loan.
Although most people have their banking resolutions prepared before going to the bank, some banks require you to fill out their standard form. Each bank will be different in this respect. If you apply for a loan, the bank will keep the banking resolutions on file along with the Certificate of Incorporation/Formation, and the bylaws/Operating Agreement.
For any additional questions, please contact Harvard Business Services, Inc. at 1-800-345-2677.
Image courtesy of Sebastien Wiertz
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.