A borrowing resolution is a formal document created by a corporation's board of directors. This document outlines who is authorized to sign checks and borrow funds from financial institutions on behalf of the corporation. Borrowing resolutions are often referred to as corporate resolutions and serve as a critical part of corporate governance.
In legal practice, borrowing resolutions are used primarily in corporate law. They are essential for establishing the authority of individuals within a corporation to engage in financial transactions. This includes obtaining loans, opening bank accounts, and signing financial documents. Users can often manage the creation of borrowing resolutions themselves by utilizing legal templates, such as those available from US Legal Forms, which are drafted by qualified attorneys.
Here are a couple of examples of abatement:
Example 1: A corporation adopts a borrowing resolution allowing its president and treasurer to sign loan documents with a bank. This resolution is necessary for the bank to recognize their authority.
Example 2: A nonprofit organization creates a borrowing resolution that permits its executive director to open a line of credit for operational expenses. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | May require additional documentation for borrowing over a certain amount. |
| New York | Specific forms must be filed with the state for certain types of loans. |
| Texas | Allows for electronic signatures on borrowing resolutions. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Corporate Resolution | A formal decision made by a corporation's board. | Broader in scope; can cover various corporate actions beyond borrowing. |
| Loan Agreement | A contract between a lender and borrower detailing loan terms. | Specific to the terms of a loan, while a borrowing resolution grants authority to enter such agreements. |
If you are part of a corporation and need to establish borrowing authority, consider drafting a borrowing resolution. You can use templates from US Legal Forms to simplify this process. If your situation is complex or involves significant amounts, consulting with a legal professional is recommended.
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A borrowing resolution is a formal document that specifies who in a corporation can borrow money and sign checks.