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Business Bank Account Resolution Guide: What Entrepreneurs Need to Know

Learn everything about business bank account resolutions - why they're essential for entrepreneurs, family businesses, and professional service providers, and how to properly prepare one.

Introduction

A Business Bank Account Resolution is a formal document that authorizes specific individuals to open and manage a bank account on behalf of a business entity. This critical legal document serves as proof to financial institutions that certain people have the legal authority to act on the company's behalf in banking matters. Whether you're starting a family business, launching your first entrepreneurial venture, or establishing a professional service firm, understanding how bank account resolutions work is essential for properly managing your business finances and ensuring smooth banking operations.

Key Things to Know

  1. 1

    A Business Bank Account Resolution is legally required by most financial institutions before they will allow you to open a business bank account.

  2. 2

    The resolution protects both your business and the bank by clearly documenting who has authority to manage company finances.

  3. 3

    For family businesses, clearly defining financial authority through a resolution can help prevent conflicts and ensure business continuity during family transitions.

  4. 4

    First-time entrepreneurs should understand that a proper bank resolution is a key step in establishing the legal separation between personal and business finances.

  5. 5

    The resolution should be updated whenever there are changes in personnel, business structure, or banking needs.

  6. 6

    Professional service providers must ensure their resolutions address any industry-specific requirements for handling client funds or trust accounts.

  7. 7

    Many banks provide their own resolution templates, but having an attorney review the document can provide additional protection for your business.

  8. 8

    Maintaining detailed records of when and how the resolution was adopted is important for legal compliance and potential future disputes.

Key Decisions

Professional Service Providers

First-time Entrepreneurs

Family Business Partners

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BUSINESS BANK ACCOUNT RESOLUTION

RESOLUTION OF [LEGAL BUSINESS NAME]

Entity Type: [BUSINESS ENTITY TYPE]
Tax ID/EIN: [TAX IDENTIFICATION NUMBER]
Principal Office Address: [BUSINESS ADDRESS]
Date of Formation: [DATE OF FORMATION]
State of Formation: [STATE OF FORMATION]

RESOLUTION DATE

This Resolution was duly adopted on [MEETING DATE] at a [regular/special] meeting of the [Board of Directors/Members/Partners/Owner] of [LEGAL BUSINESS NAME] (the "Company"), held at [MEETING LOCATION], with a quorum present and voting throughout.

RECITALS

WHEREAS, the Company is duly organized and existing under the laws of the State of [STATE OF FORMATION];

WHEREAS, pursuant to the Company's [Bylaws/Operating Agreement/Partnership Agreement/governing documents] (the "Governing Documents"), the [Board of Directors/Members/Partners/Owner] is authorized to establish banking relationships and designate individuals to act on behalf of the Company in financial matters;

WHEREAS, the Company desires to establish one or more accounts with [FINANCIAL INSTITUTION NAME] at its [BANK BRANCH INFORMATION] branch (the "Financial Institution"); and

WHEREAS, it is in the best interest of the Company to designate certain individuals to act on behalf of the Company with respect to such accounts.

NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:

ARTICLE I: ESTABLISHMENT OF BANKING RELATIONSHIP

Section 1.1. Account Authorization. The Company is hereby authorized to establish and maintain one or more [ACCOUNT TYPE] account(s) (the "Account(s)") with the Financial Institution for the purpose of [ACCOUNT PURPOSE]. The Financial Institution is hereby designated as a depository of the Company's funds.

Section 1.2. Bank Forms and Agreements. The Authorized Individuals (as defined below) are hereby authorized to execute, deliver, and perform all standard account agreements, signature cards, and other documents as may be required by the Financial Institution to establish and maintain the Account(s), and any such documents previously executed by such individuals are hereby ratified and approved.

Section 1.3. Multiple Accounts. This Resolution shall apply to any and all accounts maintained by the Company with the Financial Institution, including any accounts opened after the date of this Resolution, unless expressly limited herein or subsequently modified by a duly adopted resolution of the Company.

ARTICLE II: AUTHORIZED INDIVIDUALS

Section 2.1. Designation of Authorized Individuals. The following individuals, holding the positions indicated next to their names, are hereby designated as authorized signatories (the "Authorized Individuals") with respect to the Account(s):

  1. Name: [AUTHORIZED SIGNATORY 1]
    Title: [TITLE]
    Specimen Signature: ______________________________

  2. Name: [AUTHORIZED SIGNATORY 2]
    Title: [TITLE]
    Specimen Signature: ______________________________

  3. Name: [AUTHORIZED SIGNATORY 3]
    Title: [TITLE]
    Specimen Signature: ______________________________

  4. Name: [AUTHORIZED SIGNATORY 4]
    Title: [TITLE]
    Specimen Signature: ______________________________

Section 2.2. Removal of Prior Signatories. Any and all prior authorizations granted to individuals not listed above to act as signatories on any accounts maintained by the Company with the Financial Institution are hereby revoked and rescinded, effective immediately. The Financial Institution is hereby authorized and directed to remove such individuals from the Company's accounts.

ARTICLE III: SIGNATORY POWERS AND REQUIREMENTS

Section 3.1. General Banking Authority. Each of the Authorized Individuals is hereby authorized, on behalf of the Company and in its name, to:

(a) Sign, endorse, or otherwise execute checks, drafts, notes, bills of exchange, acceptances, and other orders for the payment of funds issued in the Company's name;

(b) Deposit funds to the Account(s), endorse for deposit or collection checks, drafts, notes, and other instruments payable to the Company or to its order;

(c) Give instructions regarding wire transfers, ACH transfers, and other electronic transfers of funds to or from the Account(s);

(d) Access and review account statements, canceled checks, and other account information;

(e) Issue stop payment orders;

(f) Close any Account(s) and receive the balance of funds on deposit; and

(g) Take any other actions necessary or convenient in connection with the maintenance and operation of the Account(s).

Section 3.2. Signature Requirements. For all transactions involving the Account(s), the following signature requirements shall apply:

(a) For transactions involving amounts less than or equal to $[AMOUNT]: The signature of any one (1) Authorized Individual shall be sufficient.

(b) For transactions involving amounts greater than $[AMOUNT] but less than or equal to $[HIGHER AMOUNT]: The signatures of at least two (2) Authorized Individuals shall be required.

(c) For transactions involving amounts greater than $[HIGHER AMOUNT]: The signatures of at least [NUMBER] Authorized Individuals shall be required, one of whom must be [SPECIFIC TITLE/POSITION].

Section 3.3. Transaction Limits. The following transaction limits shall apply to the specified Authorized Individuals:

(a) [AUTHORIZED SIGNATORY 1] and [AUTHORIZED SIGNATORY 2] shall have no transaction limit, subject to the signature requirements set forth in Section 3.2.

(b) [AUTHORIZED SIGNATORY 3] shall have a transaction limit of $[AMOUNT] per transaction and $[AMOUNT] per day.

(c) [AUTHORIZED SIGNATORY 4] shall have a transaction limit of $[AMOUNT] per transaction and $[AMOUNT] per day.

ARTICLE IV: ADDITIONAL BANKING SERVICES

Section 4.1. Online Banking Services. The following Authorized Individuals are hereby authorized to access, manage, and utilize online banking services provided by the Financial Institution in connection with the Account(s):

  1. Name: [ONLINE BANKING AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]
    Access Level: [Full/Limited/View-Only]

  2. Name: [ONLINE BANKING AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]
    Access Level: [Full/Limited/View-Only]

Section 4.2. Debit/Credit Card Authorization. The following Authorized Individuals are hereby authorized to receive and use business debit and/or credit cards linked to the Account(s), subject to the transaction limits specified below:

  1. Name: [CARD AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]
    Card Type: [Debit/Credit/Both]
    Transaction Limit: $[AMOUNT] per transaction, $[AMOUNT] per day

  2. Name: [CARD AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]
    Card Type: [Debit/Credit/Both]
    Transaction Limit: $[AMOUNT] per transaction, $[AMOUNT] per day

Section 4.3. Wire Transfer Authority. The following Authorized Individuals are hereby authorized to initiate, approve, and execute wire transfers from the Account(s), subject to the limits specified below:

  1. Name: [WIRE TRANSFER AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]
    Wire Transfer Limit: $[AMOUNT] per transaction, $[AMOUNT] per day

  2. Name: [WIRE TRANSFER AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]
    Wire Transfer Limit: $[AMOUNT] per transaction, $[AMOUNT] per day

For all wire transfers exceeding $[AMOUNT], the approval of at least two (2) Authorized Individuals shall be required.

Section 4.4. Borrowing Authority. The following Authorized Individuals are hereby authorized to borrow funds, establish lines of credit, execute loan documents, and pledge Company assets as collateral on behalf of the Company:

  1. Name: [BORROWING AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]
    Borrowing Limit: $[AMOUNT]

  2. Name: [BORROWING AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]
    Borrowing Limit: $[AMOUNT]

For any borrowing exceeding $[AMOUNT], prior approval of the [Board of Directors/Members/Partners/Owner] shall be required.

Section 4.5. Safe Deposit Box Access. The following Authorized Individuals are hereby authorized to access, control, and manage any safe deposit box(es) maintained by the Company at the Financial Institution:

  1. Name: [SAFE DEPOSIT BOX AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]

  2. Name: [SAFE DEPOSIT BOX AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]

Access to any safe deposit box shall require the presence of at least [NUMBER] of the above-named individuals.

Section 4.6. Facsimile Signatures. The Financial Institution is hereby authorized to honor and pay any and all checks, drafts, and other instruments for the payment of money drawn in the name of the Company bearing or purporting to bear the facsimile signature(s) of any of the following Authorized Individuals:

  1. Name: [FACSIMILE SIGNATURE AUTHORIZED INDIVIDUAL 1]
    Title: [TITLE]
    Specimen Facsimile Signature: ______________________________

  2. Name: [FACSIMILE SIGNATURE AUTHORIZED INDIVIDUAL 2]
    Title: [TITLE]
    Specimen Facsimile Signature: ______________________________

The Company shall provide to the Financial Institution specimens of such facsimile signatures. The Financial Institution shall be entitled to honor and charge the Company for all such instruments, regardless of by whom or by what means the actual or purported facsimile signature thereon may have been affixed, if such signature resembles the facsimile specimen provided to the Financial Institution.

ARTICLE V: CERTIFICATION AND EFFECTIVENESS

Section 5.1. Certification. The undersigned, [CERTIFYING OFFICER NAME], [CERTIFYING OFFICER TITLE] of the Company, hereby certifies that:

(a) The foregoing is a true and correct copy of the resolution duly adopted by the [Board of Directors/Members/Partners/Owner] of the Company on the date set forth above;

(b) Such resolution is in full force and effect and has not been amended, rescinded, or revoked;

(c) Such resolution is in accordance with the Governing Documents of the Company and in compliance with all applicable laws and regulations of the State of [STATE OF FORMATION];

(d) The Company is duly organized, validly existing, and in good standing under the laws of the State of [STATE OF FORMATION]; and

(e) The signatures appearing above are the genuine signatures of the persons indicated.

Section 5.2. Continuing Validity. This Resolution shall remain in full force and effect and the Financial Institution may rely on it until the Financial Institution receives written notice of its revocation, modification, or replacement. Any such notice shall not affect any action taken by the Financial Institution prior to its receipt of such notice. The authority granted herein shall apply with equal force and effect to the successors in office of the Authorized Individuals named herein.

Section 5.3. Indemnification. The Company hereby agrees to indemnify and hold harmless the Financial Institution from any and all claims, demands, expenses, losses, damages, and costs, including reasonable attorneys' fees, resulting from the Financial Institution's reliance on this Resolution and any actions taken by the Financial Institution in accordance with this Resolution.

Section 5.4. Governing Law. This Resolution shall be governed by and construed in accordance with the laws of the State of [STATE OF FORMATION], without giving effect to any choice of law or conflict of law provisions.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the Company, if applicable, this ____ day of ____________, [YEAR].

[CERTIFYING OFFICER NAME], [CERTIFYING OFFICER TITLE]

[CORPORATE SEAL] (If applicable)

ACKNOWLEDGMENT

State of _____________________ ) ) ss. County of ____________________ )

On this ____ day of ____________, [YEAR], before me, the undersigned notary public, personally appeared [CERTIFYING OFFICER NAME], known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same for the purposes therein contained.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public My Commission Expires: ______________

Delaware Requirements for Business Bank Account Resolution

Delaware General Corporation Law Authority (Delaware General Corporation Law, Title 8, Section 141)

The resolution must comply with Delaware General Corporation Law (DGCL) Section 141, which grants the board of directors the authority to manage the business and affairs of the corporation, including the establishment of bank accounts.

Delaware Limited Liability Company Act Compliance (Delaware Limited Liability Company Act, Title 6, Chapter 18, Section 18-402)

For LLCs, the resolution must comply with Delaware LLC Act Section 18-402, which establishes that the management of a limited liability company shall be vested in its members or managers as specified in the operating agreement.

Delaware Partnership Authorization (Delaware Revised Uniform Partnership Act, Title 6, Chapter 15)

For partnerships, the resolution must comply with Delaware Revised Uniform Partnership Act provisions regarding partner authority to bind the partnership in banking matters.

Corporate Seal Requirements (Delaware General Corporation Law, Title 8, Section 122(3))

The resolution should address the use of corporate seal if required by the corporation's bylaws, though Delaware law does not mandate the use of a corporate seal for banking resolutions.

Bank Secrecy Act Compliance (31 U.S.C. §§ 5311-5330)

The resolution must acknowledge compliance with the Bank Secrecy Act requirements for business accounts, including customer identification program requirements and suspicious activity reporting obligations.

USA PATRIOT Act Compliance (Public Law 107-56, Section 326)

The resolution must address compliance with the USA PATRIOT Act's enhanced due diligence requirements for business accounts, including verification of beneficial ownership information.

Uniform Commercial Code Authorization (Delaware Code, Title 6, Article 4)

The resolution must comply with Delaware's adoption of the Uniform Commercial Code Article 4 regarding bank deposits and collections, which governs the relationship between the bank and its business customers.

Federal Deposit Insurance Corporation Regulations (12 CFR Part 330)

The resolution must acknowledge compliance with FDIC regulations regarding business deposit accounts, including deposit insurance coverage limitations for business entities.

Electronic Funds Transfer Act Compliance (15 U.S.C. § 1693 et seq.)

The resolution should address compliance with the Electronic Funds Transfer Act for business accounts, including authorization for electronic banking services and liability for unauthorized transfers.

Regulation CC Compliance (12 CFR Part 229)

The resolution should acknowledge compliance with Regulation CC regarding funds availability policies for business accounts, including hold periods for deposited checks.

Delaware Secretary of State Filing Requirements (Delaware Code, Title 8, Section 502 (for corporations))

The resolution should reference the business entity's good standing with the Delaware Secretary of State, as banks typically verify this status before opening business accounts.

Authorized Signatories Designation (Delaware General Corporation Law, Title 8, Section 142 (for corporations))

The resolution must clearly designate authorized signatories in accordance with Delaware law requirements for agency and authority, specifying who may act on behalf of the business entity in banking matters.

Internal Revenue Service Requirements (26 U.S.C. § 6109)

The resolution must address compliance with IRS requirements for business accounts, including obtaining an Employer Identification Number (EIN) and tax reporting obligations.

FinCEN Beneficial Ownership Rule Compliance (31 CFR § 1010.230)

The resolution must acknowledge compliance with FinCEN's Beneficial Ownership Rule, requiring disclosure of beneficial owners who own 25% or more of the business and at least one individual who controls the entity.

Delaware Franchise Tax Compliance (Delaware Code, Title 8, Chapter 5)

The resolution should reference the business entity's compliance with Delaware franchise tax requirements, as banks may verify tax compliance status before opening accounts.

Regulation O Compliance (12 CFR Part 215)

The resolution should address compliance with Regulation O if any directors, officers, or principal shareholders of the business are also affiliated with the bank where the account is being established.

Delaware Uniform Unclaimed Property Act (Delaware Code, Title 12, Chapter 11)

The resolution should acknowledge compliance with Delaware's Unclaimed Property Law regarding dormant business accounts and escheatment requirements.

Corporate Borrowing Authority (Delaware General Corporation Law, Title 8, Section 122(13))

The resolution should specify authority for obtaining loans or credit facilities in accordance with Delaware corporate law requirements for borrowing authority.

Online Banking Authorization (Delaware Code, Title 6, Chapter 12A)

The resolution should address authorization for online banking services in compliance with Delaware's Uniform Electronic Transactions Act, which governs electronic records and signatures.

Foreign Account Tax Compliance Act Requirements (26 U.S.C. §§ 1471-1474)

The resolution should address FATCA compliance requirements if the business has foreign ownership or foreign financial interests that trigger FATCA reporting obligations.

Frequently Asked Questions

A Business Bank Account Resolution is a formal document adopted by a company's governing body (board of directors, LLC members, or partners) that authorizes specific individuals to open, manage, and make transactions through the company's bank accounts. The resolution typically identifies who can sign checks, make deposits, withdraw funds, obtain loans, and perform other banking activities on behalf of the business. Banks require this document as proof that the people handling the company's finances have been properly authorized to do so by the business entity.

Banks require Business Bank Account Resolutions to protect both themselves and your business. For the bank, the resolution provides legal protection by ensuring they're allowing only authorized individuals to access company funds. For your business, it creates a clear record of who has financial authority, reducing the risk of unauthorized transactions or financial misconduct. Additionally, the resolution helps banks comply with various regulations, including anti-money laundering laws and Know Your Customer (KYC) requirements.

A comprehensive Business Bank Account Resolution typically includes: 1) The legal name of the business entity; 2) The type of business entity (LLC, corporation, partnership, etc.); 3) The date the resolution was adopted; 4) The names, titles, and sometimes personal information of authorized signatories; 5) Specific banking powers granted to each authorized individual; 6) Any limitations on banking authority; 7) Certification by the secretary or another officer that the resolution was properly adopted; and 8) The company seal, if applicable. Some resolutions may also include specimen signatures of authorized individuals.

For a family business, creating a Business Bank Account Resolution involves several steps: 1) Hold a formal meeting with all relevant family members who are part of the business's governing body; 2) Decide which family members will have banking authority and what specific powers each will have; 3) Document these decisions in the resolution format, often using a template provided by your bank or created by your attorney; 4) Have all required parties sign the document according to your business structure's requirements; 5) Keep minutes of the meeting where the resolution was adopted; and 6) Consider having clear succession plans within the resolution to address what happens if a family member leaves the business or becomes incapacitated.

As a first-time entrepreneur, understanding bank account resolutions is crucial: 1) You'll need this document to open a business bank account, which is essential for separating personal and business finances; 2) The resolution demonstrates your business's legitimacy to financial institutions; 3) Consider carefully who should have banking authority—while convenience matters, security is paramount; 4) The resolution should be updated whenever there are changes in authorized personnel; 5) Different business structures (sole proprietorship, LLC, corporation) may have different requirements for resolutions; and 6) Many banks offer templates, but having an attorney review your resolution can ensure it meets all legal requirements and protects your business interests.

A Business Bank Account Resolution should be updated whenever there are significant changes to your business that affect banking authority, including: 1) When an authorized signer leaves the company or changes roles; 2) When you want to add new signatories; 3) When you change the scope of banking authority for any individual; 4) After major business structure changes, such as converting from an LLC to a corporation; 5) When opening accounts at a new financial institution; and 6) Periodically (many businesses review banking resolutions annually) to ensure they remain current. Keeping your resolution updated helps maintain proper financial controls and ensures banking operations continue smoothly during transitions.

Not having a proper Business Bank Account Resolution can lead to several risks: 1) Inability to open a business bank account, forcing you to mix personal and business finances; 2) Unauthorized access to company funds if authority isn't clearly defined; 3) Banking disruptions if key personnel leave and new signatories can't be quickly established; 4) Potential personal liability issues if business and personal finances aren't properly separated; 5) Difficulties obtaining business loans or credit; 6) Complications during business audits or tax filings; and 7) Challenges in resolving disputes about who had authority to conduct specific transactions. A well-crafted resolution helps mitigate these risks by clearly establishing financial authority.

Professional service providers (like law firms, medical practices, accounting firms) should consider several specific factors when creating bank account resolutions: 1) Compliance with professional ethics rules regarding handling of client funds or trust accounts; 2) Clear separation between operating accounts and any client trust accounts; 3) Designation of which partners or employees can access different types of accounts; 4) Implementing stronger internal controls, such as requiring multiple signatures for certain transactions; 5) Addressing how banking authority changes when partners join or leave the practice; and 6) Ensuring the resolution complies with any industry-specific regulations governing financial management in your professional field.

Yes, you can use a template for your Business Bank Account Resolution, but with some important caveats: 1) Many banks provide their own resolution templates that meet their specific requirements; 2) Generic templates are available online but may need customization to fit your business structure and needs; 3) Templates should be reviewed to ensure they include all necessary authorizations for your specific banking needs; 4) Consider having an attorney review any template to ensure it complies with state laws and adequately protects your business interests; 5) Even when using a template, the resolution must be properly adopted according to your business's governance requirements; and 6) Templates should be customized to reflect any special circumstances or restrictions on banking authority specific to your business.

While related, bank resolutions and corporate resolutions serve different purposes: A bank resolution specifically authorizes individuals to conduct banking activities on behalf of the business and is typically required by financial institutions when opening accounts. A corporate resolution is a broader term referring to any formal decision made by a corporation's board of directors or shareholders, which could address various matters beyond banking, such as approving contracts, hiring executives, issuing stock, or changing company policies. A bank resolution is essentially a specific type of corporate resolution that focuses exclusively on banking matters. For LLCs and partnerships, similar distinctions exist between general business resolutions and specific banking resolutions.