An LLC member resolution is a written record showing that the owners of a limited liability company formally authorized a specific action. It exists so that a bank, title company, buyer, or court can later confirm that whoever signed on the company’s behalf actually had the authority to do so. Keeping resolutions on file also reinforces the legal separation between you and your LLC, which is the point of forming one.
When You Actually Need One
Most daily business decisions do not require a resolution. Ordering supplies, paying routine bills, and handling ordinary operations fall within the normal scope of running the company. Resolutions matter when a decision is significant enough that someone could later question whether it was properly authorized. Your operating agreement usually lists which actions require a formal vote, but a handful of situations almost always call for one.
Real estate transactions are the most common trigger. When an LLC buys or sells property, the title company needs to confirm that the signing member can bind the entity. Title companies routinely review the articles of organization, operating agreement, and any additional resolutions before closing, and without that paperwork the closing stalls.
Banks ask for authorization documents when an LLC opens a business checking account, because they need to know who can write checks, access funds, and sign on the account. A resolution listing authorized signers satisfies that requirement. SBA-backed loans have their own resolution forms borrowers must complete as part of the loan process.
Beyond money transactions, document any decision that changes the company’s structure or direction:
- Adding or removing a member, including any changes to ownership percentages, capital contributions, and profit and loss allocations.
- Dissolving the LLC. State laws vary on the threshold, with some requiring a unanimous vote and others allowing a simple majority or two-thirds.
- Amending the operating agreement, even if every member agrees informally.
- Entering major contracts, including long-term leases, high-value service agreements, and significant equipment purchases.
- Hiring key employees or adjusting member compensation, where conflicts of interest are easiest to defuse with a transparent vote.
Who Gets to Vote
The answer depends on whether your LLC is member-managed or manager-managed.
In a member-managed LLC, every owner is an agent of the company with power to bind it. Resolutions require a vote of the members, and each owner’s say is proportional to their ownership interest unless the operating agreement changes that default.
In a manager-managed LLC, designated managers handle business decisions while the other members take a passive role. Day-to-day authority sits with the managers, but fundamental decisions such as selling all the company’s assets, dissolving, or amending the operating agreement still typically require a member vote. A well-drafted operating agreement defines which decisions the managers can make alone and which need member approval.
Single-member LLCs are a special case. There is no group to vote, but documenting major decisions in a written resolution is still worth doing. Courts weighing whether to pierce the LLC’s protective veil look at whether the owner treated the company as a separate entity. A single-member resolution, signed and dated, shows that the business followed its own governance procedures rather than running as an extension of one person’s finances.
Notice, Quorum, and Voting Thresholds
Before any vote counts, every member entitled to participate needs proper notice. Unlike corporations, LLCs are not subject to rigid statutory notice requirements in most states. The operating agreement controls how much advance notice is required, what the notice must say, and how it can be delivered. If the agreement is silent, give every member reasonable written notice stating the date, time, and purpose of the vote.
Quorum is the minimum participation needed for the vote to count. The usual default, when the operating agreement does not specify one, is a majority in interest: members holding more than 50 percent of the ownership interests must be present or voting. An operating agreement can set the quorum higher or lower, but requiring 100 percent lets a single absent member block action.
Voting thresholds decide how many votes a resolution needs to pass once a quorum exists. Under most state LLC statutes, including those modeled on the Revised Uniform Limited Liability Company Act, ordinary business decisions require consent of a majority of members, measured by ownership interest rather than headcount. Extraordinary actions such as dissolution, selling substantially all the company’s assets, or amending the operating agreement often require a higher threshold, with some operating agreements calling for a two-thirds supermajority or unanimity. The operating agreement controls; the statutory default only fills gaps where the agreement is silent.
What Goes in the Resolution
A resolution does not need to be long, but it does need to be specific enough that a stranger reading it years later would understand exactly what was decided. Vague language like “the members approved the purchase” invites later disputes about scope and terms.
Every resolution should include:
- The LLC’s full legal name as it appears in the articles of organization, along with the Employer Identification Number.
- The date and location of the vote. For written consents circulated by email, the date each member signed works.
- Every member who participated, with their ownership percentage.
- A concrete description of the action authorized. If the company is approving a $75,000 equipment purchase, name the vendor, the equipment, and the member authorized to sign the purchase agreement.
- The vote count, including how each member voted and confirmation that the result met the threshold required by the operating agreement.
- Signature lines for every participating member.
When a member has a personal financial interest in the matter being voted on, disclose that conflict in the resolution itself. If one member owns the building the LLC is voting to lease, the other members need to know before casting their votes. Many operating agreements require disclosure as a condition of a valid vote, and documenting the conflict protects everyone if the transaction is later questioned.
Templates from online legal document services will get you most of the way there for routine decisions. For anything complex or high-stakes, having a business attorney draft or review the resolution is worth the cost. Notarization is not required in most situations, though some third parties request it for additional verification.
Passing the Resolution
Meeting or Written Consent
The traditional approach is to hold a meeting, discuss the matter, vote, and record the outcome in the resolution. LLC statutes in most states also let members act by written consent without holding a meeting, which is more practical for small businesses where the members already agree.
Written consent works by circulating the resolution document to all members for signature. Most state statutes require consent from at least the same number of members who would have had to vote yes at a meeting. Some states and some operating agreements require unanimous written consent for action taken outside a meeting, so check both before relying on this method. The signed consent then takes the place of meeting minutes.
Electronic Signatures
Remote members do not need to sign a paper copy. Under the federal ESIGN Act, a signature or contract cannot be denied legal effect solely because it is in electronic form. A member who signs through a digital signature platform has signed a document just as binding as one signed with a pen.
Where to Keep It
Once signed, the resolution belongs in the company’s official records alongside the articles of organization, operating agreement, and any prior resolutions or meeting minutes. Some companies keep a physical minute book, others a secure digital folder. The format matters less than consistency and accessibility, because when a lender, buyer, or title company asks for proof of authorization, you need to produce it quickly.
The IRS requires businesses to keep employment tax records for at least four years, but member resolutions and formation documents should be kept permanently, or at least until every possible legal claim related to the decision has expired. A resolution authorizing a 10-year commercial lease could become relevant in litigation well beyond any standard retention period. Treat resolutions as permanent records.
Amending or Rescinding a Resolution
A resolution is not permanent. If circumstances change, the members can pass a new resolution that amends or rescinds an earlier one. The process mirrors the original: draft a new resolution identifying the prior one by date and subject, describe the change, hold a vote meeting the same threshold required for the original action, and collect signatures.
If a resolution authorized a specific person to sign contracts for the LLC and that person later leaves the company, a new resolution should revoke their authority and name a replacement. Banks and other third parties rely on the most recent resolution they have on file, so update them whenever signing authority changes.
What Happens If You Skip It
The protection an LLC provides depends on owners actually treating it as a separate entity. Courts deciding whether to pierce the veil and hold owners personally liable look at whether members followed basic formalities, including holding votes and keeping records. A pattern of making major decisions with no documented authorization signals that the LLC exists on paper only. The alter ego doctrine lets a court treat the LLC and its owner as the same person when there is no meaningful separation between the two, and documented resolutions are one of the clearest ways to show that separation.
Missing resolutions also create immediate practical problems. A real estate closing can collapse if the title company cannot verify signing authority. A bank can freeze account access if its records show an unauthorized signer. Internal disputes among members become far harder to resolve when there is no written record of who agreed to what. The few minutes it takes to draft and sign a resolution after a major decision is trivial compared with the cost of litigating the same question years later.