Resolutions of LLC Members of Buyer
(Asset Purchase)

Summary

These clauses provide for authorization by a limited liability company's members of an asset purchase and can be inserted into the minutes of the meeting at which the members approve the transaction or a written consent of the members. These clauses include practical guidance and drafting notes. Depending on state law requirements and assuming the members of a limited liability company have not delegated such authority to the managers of the company (e.g., pursuant to the terms of a limited liability company agreement, operating agreement, or equivalent governance document), approval of the members of a limited liability company may be required for the company to acquire a third party's business through an asset purchase. In drafting resolutions to authorize an asset purchase, it is good practice to describe the underlying reason for the resolutions and establish the legal basis for the authorized action (e.g., the members have determined that the actions are in the best interests of the company). In addition to authorizing the purchase, the resolutions should also approve the transaction documents and, if the company has officers or managers, specifically authorize and direct the company's officers or managers to take all actions needed to effectuate the asset purchase. These clauses assume that the term "the Company" has already been defined; if not, it should be defined as follows where first used: [name of buyer], a limited liability company formed under the laws of [state of formation] (the "Company"). These clauses also assume that there is more than one member of the Company. If there is only one member then all references to the "Members" can be replaced with references to the "Sole Member." For a full listing of key content for in-house counsel and corporate secretaries when performing corporate functions, see In-House Corporate Secretary Resource Kit. For further discussion of the approvals required in an asset purchase, see Deal Documents and Approvals in M&A Deals.