Board resolutions are numerous issues to address as one creates and establishes a new company.
Addressing these issues early not only saves time but establishes the foundations for internal control within the company.
It also demonstrates to future investors a level of seriousness related to governance, which will pay dividends to the company in the future, during the due diligence process.The first four Board resolutions below are typically included in formation documents such as the Operating Agreement of the LLC. IF they are not included in these documents, establish a board resolution and address each at your earliest convenience:
- Appointment of a Manager
- Appointment of a Tax Management Partner, (TMP)
- Open a bank account
- Establish roles and define compensation for participants
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The next four board resolutions deal with issues the company will encounter as operations commence. Addressing these as part of the legal documentation process related to establishing the company establishes the appropriate foundation and permits the entrepreneur and his team to focus more fully on operations as the entity develops instead of being distracted by administrative issues as problems are encountered.
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- Authorizations to execute operations agreements and contracts
- Authorizations to buy or sell assets
- Authorizations to enter into agreements to provide financing (equity and debt)
- Authorizations to execute employee benefits plans
Note: The author is not an attorney and FundingSage is not a law firm. FundingSage’s employees do not provide legal advice. We recommend that you seek the services of an attorney if legal advice is required.
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