A corporate resolution that authorizes borrowing on a line of credit is often referred to a borrowing resolution. This resolution indicates that the members (LLC) or Board of Directors (Corporation) have held a meeting and conducted a vote allowing the company to borrow a specific loan amount. The borrowing resolution states which officers are authorized within the company to borrow and the bank where the company may borrow this specific sum.
It is critical that a company prepares this corporate resolution, as the vote acknowledges that the company will go into debt from borrowing on a line of credit. If the vote does not pass, the borrowing resolution cannot be established and the company will be unable to borrow on a line of credit.
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WHEREAS, this Corporation desires to borrow money, be it:
RESOLVED, that the proper officers of this Corporation are hereby authorized to borrow from the BANK NAME Bank, for and in behalf of this Corporation, a sum not to exceed MAXIMUM LOAN AMOUNT , ( MAXIMUM LOAN AMOUNT NUMERICAL ) on a promissory note maturing ( NUMBER OF DAYS ) days from the date hereof, to be signed by the proper officers of this Corporation, and to bear interest not to exceed the rate of INTEREST RATE percent, ( INTEREST RATE NUMERICAL %) per annum, and with the additional privilege of renewing the balance of said loan at its maturity, for another period of NUMBER OF DAYS ( NUMBER OF DAYS NUMERICAL ) days, and the proper officers of this Corporation are hereby authorized and directed to sign any new or renewal note or notes required by BANK NAME Bank to carry out the provisions of this resolution, which new note or notes shall bear such rate of interest as shall be agreed upon between this Corporation and the BANK NAME Bank at the time of such renewal or renewals.
The undersigned hereby certifies that he/she is the duly elected and qualified Secretary and the custodian of the books and records and seal of COMPANY NAME ,a corporation duly formed pursuant to the laws of the state of YOUR STATE and that the foregoing is a true record of a resolution duly adopted at a meeting of the DIRECTORS/MEMBERS and that said meeting was held in accordance with state law and the Bylaws of the above-named Corporation on MEETING DATE ,and that said resolution is now in full force and effect without modification or rescission.
IN WITNESS WHEREOF, I have executed my name as Secretary and have hereunto affixed the corporate seal of the above-named Corporation this DAY OF THE WEEK , CURRENT MONTH of CURRENT YEAR .
SECRETARY NAME , Secretary