What is an LLC Resolution to Purchase Real Estate Form?

Definition & Meaning

An LLC resolution to purchase real estate is a formal document that captures the decision made by the members of a Limited Liability Company (LLC) to authorize the purchase of a specific property. This resolution typically outlines crucial details such as the property’s address, purchase price, and the individuals authorized to sign the necessary documents on behalf of the LLC. While not always legally mandated, having this resolution is considered a best practice, as it provides clear evidence that the decision was made in accordance with the LLC's operating agreement and governance structure.

Key Elements of the LLC Resolution

When drafting an LLC resolution to purchase real estate, several key elements should be included:

• Title of the Resolution: Clearly state that this is a resolution to purchase real estate.
• Date of the Meeting: Include the date when the resolution was passed.
• Property Description: Provide a detailed description of the property, including its address and any relevant legal descriptions.
• Purchase Price: Specify the agreed-upon purchase price of the property.
• Authorized Signatories: Identify the members or managers authorized to sign the purchase agreement and other related documents.
• Voting Results: Document the outcome of the vote, including how many members were in favor, against, or abstained.

How to Fill Out the LLC Resolution

Filling out the LLC resolution to purchase real estate involves several steps:

• Gather Information: Collect all necessary details about the property and the members of the LLC.
• Draft the Resolution: Use a template or create a document that includes all key elements outlined previously.
• Review with Members: Present the draft resolution to all LLC members for review and discussion.
• Vote: Conduct a formal vote among the members to approve the resolution.
• Document the Vote: Record the results of the vote in the resolution document.
• Sign the Resolution: Have the authorized members sign the document to formalize the decision.

Who Typically Uses the LLC Resolution?

The LLC resolution to purchase real estate is primarily used by:

• Real Estate Investment Groups: LLCs formed to invest in properties often require resolutions for significant purchases.
• Small Business Owners: Those looking to acquire commercial properties for their businesses may need this resolution.
• Property Management Companies: LLCs managing multiple properties may use resolutions to streamline their purchasing process.

Legal Use of the LLC Resolution

Legally, the LLC resolution serves several purposes:

• Proof of Authority: It demonstrates that the members have authorized the purchase, protecting against disputes.
• Compliance with Operating Agreements: It ensures that the decision aligns with the LLC's governing documents.
• Facilitating Transactions: Many lenders and title companies require a resolution before closing on a property.

Examples of Using the LLC Resolution

Consider the following scenarios where an LLC resolution to purchase real estate is utilized:

• Example One: An LLC formed by several investors votes to purchase a multi-family property. The resolution details the property, the purchase price, and the members authorized to sign.
• Example Two: A small business LLC decides to buy a commercial space for operations. The resolution outlines the purchase agreement and authorizes the business owner to finalize the deal.

Steps to Complete the LLC Resolution

Completing the LLC resolution involves a systematic approach:

• Prepare a Draft: Start with a template that includes all necessary sections.
• Schedule a Meeting: Arrange a meeting with all members to discuss the property acquisition.
• Vote on the Resolution: Ensure all members have the opportunity to vote, documenting the results accurately.
• Finalize the Document: After approval, ensure the resolution is signed by the authorized members.
• Store the Document: Keep the signed resolution in the LLC's records for future reference.

Why Should You Use an LLC Resolution?

Using an LLC resolution to purchase real estate provides several benefits:

• Clarity: It clarifies the decision-making process within the LLC.
• Protection: It protects the members by documenting the authority and agreement on the transaction.
• Facilitates Transactions: Many financial institutions require a resolution for processing loans or mortgages related to property purchases.