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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.

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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 before you file

Before you file a Business Bank Account Resolution in Delaware, a few decisions shape the document: which option to choose and what each one means. The Business Bank Account Resolution guide walks through them.

Open the Business Bank Account Resolution guide

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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