Business Entity Document/Authorization Requirements

Lenders need documentation that the business entity (1) approves the loan transaction and (2) authorizes specific individuals to act on behalf of the organization.

Corporations:

  • Articles of Incorporation **REQUIRED**
  • Verify precise organizational name
  • Good Standing with Secretary of State (available online) **REQUIRED**
  • Bylaws
  • Authorization Resolution before lending to Corporation
  • Signed by the Board of Directors of Corporation
    • Approving Loan transaction/account opening
    • Authorizing one or more individuals to act on behalf of the corp.

Partnerships:

  • Partnership Agreement
  • Not legally required, but good practice to require prospective borrowers to create and provide if non-existing
  • Ensures partnership exists, between what parties & under what legal name
  • Authority and Liability of individual partners
  • Partnership Authorization should be obtained before lending to Partnership
  • Legal doc. who is acting on behalf of the partnership & to what extent

Limited Liability Companies:

  • Articles of Organization **REQUIRED**
  • Verify precise organizational name
  • Good Standing with Secretary of State (available online) **REQUIRED**
  • Operating Agreement, sometimes known as Bylaws
  • Member Control Agreement (if existing)
  • Be sure these documents DO NOT allow members to dissolve the organization at will, and that life of organization exceeds loan term
  • Obtain Authorized Resolution signed by the manager of the LLC
  • Approving loan transaction/account opening
  • Authorizing one or more individuals to act on behalf of the organization

Sole Proprietorship:

  • No legal documents/authorization required, person is business

*Additional Documentation may be Required, based on situation.