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Can we prepare a joint corporate resolution for both corporation we own?

Can we prepare a joint corporate resolution for both corporation we own?

Full question:

We have two corporations and wish to transfer the assets and liabilities of Corp A to Corp B. Officers and shareholders are the same for both corporations. Can we prepare a joint corporate resolution (A&B) to accomplish this or what is the most economical and legally sufficient way to do this. We anticipate dissolving Corp. A. If resolution is suggested, proposed form or language would be appreciated. Both corporations are family owned.

Category: Corporations
Subcategory: Corporate Dissolution
Date: 04/07/2025
State: Maryland

Answer:

The best course of action will depend on all the facts involved. For example, please see the following discussion of tax implications in corporate acquisitions:

http://whatistaxed.com/regs/CFR-MainFolder/26CFR-2004/a257.g.akamaitech.net/7/257/2422/12feb20041500/edocket.access.gpo.gov/cfr_2004/aprqtr/26cfr1.304-2.htm

http://www.ipbtax.com/CM/Articles/NewGuidanceIsNeededfortheSubstantiallyAllRuleasAppliedtoAcquisitions.asp

I suggest you contact a local attorney who can review all the facts and documents involved. We can assist you with searching to locate forms or we can draft add forms you may need to our database. However, we cannot advise you to use one particular form over another that address the same matter. We can show you what is available. You can take a look at the forms below and see if they fit your need. If they do not, let me know and we may be able to add a form for your need. You may order a form or package by phone by calling Toll Free: 1-(877) 389-0141 - 8:30-5:00 Central Time Zone Monday – Friday.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What is the difference between operating agreement and corporate resolution?

An operating agreement is a document that outlines the management structure and operating procedures of a limited liability company (LLC). It details the roles of members and how decisions are made. In contrast, a corporate resolution is a formal document that records decisions made by a corporation's board of directors or shareholders. It is often used to authorize specific actions, such as transferring assets or approving contracts. While both documents guide governance, they serve different purposes and apply to different types of entities.

What is the difference between a director's resolution and a shareholder resolution?

A director's resolution is a decision made by the board of directors, typically concerning the management and operation of the corporation. It may involve approving budgets or appointing officers. A shareholder resolution, on the other hand, is proposed by shareholders and addresses matters that require their approval, such as mergers or changes in corporate structure. Both types of resolutions are essential for corporate governance but originate from different groups within the corporation.

What is a certified corporate resolution?

A certified corporate resolution is an official document that confirms a decision made by a corporation's board of directors or shareholders. It is typically signed by an officer of the corporation, such as the secretary, and may include a corporate seal. This certification serves as proof that the resolution was properly adopted and is often required for legal or financial transactions, such as opening bank accounts or entering contracts.

What is the purpose of a corporate resolution?

The purpose of a corporate resolution is to formally document decisions made by a corporation's board of directors or shareholders. It provides a clear record of actions taken, such as approving contracts, transferring assets, or appointing officers. This documentation is essential for legal compliance and can protect the corporation by ensuring that decisions are made according to its bylaws and state laws.

What is a corporate resolution vs. operating agreement?

A corporate resolution is a formal document that records specific decisions made by a corporation's board or shareholders, such as authorizing transactions or changes in management. An operating agreement, however, is specific to LLCs and outlines the management structure and operational procedures of the company. While both documents guide governance, they apply to different business structures and serve distinct purposes.

Is a corporation easier to transfer ownership in the form of stock?

Yes, transferring ownership in a corporation is typically easier through the sale or transfer of stock. Shareholders can sell or transfer their shares to new owners, which does not require extensive changes to the corporation's structure. This flexibility makes corporations attractive for ownership transfer compared to other business forms, like partnerships, where ownership changes may require more complex agreements or approvals.