What is an LLC Resolution?
An LLC resolution documents decisions by LLC members and company actions taken. Resolutions create a record of significant decisions like taking loans, opening bank accounts, and buying real estate. They serve as legally binding proof if a member claims an action wasn’t properly approved.
Importance of Operating Agreements
An operating agreement customizes the terms of an LLC for its members, dictating how the LLC must operate once signed. Operating agreements remain crucial governance documents, although not mandated by most states.
Dispute Resolution Process
Disputes between LLC members can be resolved through negotiation, mediation, arbitration, or litigation. An operating agreement will identify the proper forum and timeline for each step of dispute resolution.
- Managerial resolutions involve routine LLC decisions and transactions.
- Financial resolutions cover budgets, loans, bank accounts, and other fiscal matters.
- Documenting votes with member signatures, both for and against, validates resolutions.