An LLC resolution is a written record that documents an important decision made by your LLC. This article is designed for OnlyFans creators who are using or considering forming a limited liability company (LLC) for their business. We will cover what an LLC resolution is, why it matters, the types of actions that require a resolution, how to properly document them, and the specific implications for OnlyFans creators.
Understanding LLC resolutions is crucial for this audience because it guarantees legal protection, supports tax compliance, and helps prevent disputes or issues with banks, the IRS, or business partners. Whether you are just starting out or earning significant income, knowing how and when to use LLC resolutions will help you maintain your business’s integrity and safeguard your financial future.
Why LLC Resolutions Matter for All LLCs
LLC resolutions are critical for establishing authority and maintaining the “Liability Shield.” They serve as an internal, legally binding record for significant business activities, such as opening bank accounts, buying property, or adding members. Properly documenting decisions helps maintain the separation between personal and business finances, preventing “piercing the corporate veil.” Resolutions provide a clear, agreed-upon record, preventing disagreements among members regarding authorized actions. They are essential for maintaining the “corporate veil,” making sure that the business is treated as a separate entity from its owners.
Properly maintained resolutions serve as evidence that the company followed the procedures outlined in its Operating Agreement during legal compliance and audits. Documented resolutions help protect LLCs and their owners from potential disputes and liabilities. LLC resolutions serve as legal evidence of a company’s official business conduct. Documenting important decisions through LLC resolutions helps secure compliance with state laws and regulations. LLC resolutions can help make sure that the LLC is in compliance with state laws and regulations.
What Is an LLC Resolution
An LLC resolution is a legal document that records a decision approved by LLC members or managers. An LLC resolution is a written record that formally documents decisions, votes, or actions taken by a limited liability company’s members or managers. It should include a written account of the acts taken by an entity during an official meeting, conveying the votes or consent of company members. It acts as an official record that confirms the company agreed to take a specific action. This could involve opening a bank account, taking a loan, changing ownership percentage, or approving major expenses.
Unlike corporate resolutions used by large corporations, an LLC member resolution is typically simpler. It does not need to be filed with the state in most cases. Instead, it stays in your company records along with your operating agreement and other important tax records. Its purpose is proof, not public filing.
In practice, this matters because banks and lenders often require written proof that you have authority to act on behalf of your LLC. Without an LLC resolution, your bank may refuse to open an account or process certain transactions. That creates delays and unnecessary stress.
Why OnlyFans Creators Should Care About an LLC Resolution
An LLC resolution matters for OnlyFans creators because your income structure creates unique tax and legal exposure. OnlyFans income is treated as self-employment income, which means you are responsible for self-employment taxes, income tax, and quarterly estimated taxes. When your business grows, your decisions begin to affect tax obligations, profit distribution, and risk exposure.
The Risks of Informal Operations
Many creators operate casually at first. They pay expenses from personal accounts and mix personal expenses with business expenses. This is where many OnlyFans creators get it wrong. When you do not document decisions and separate business use from personal use, you weaken your legal protection and increase audit risk.
The Importance of Documentation for High Earners
For creators earning over $50,000 per month, decisions such as electing S Corp status, adjusting owner pay, or approving large deductions should be supported by a written record. A formal record protects you if the IRS reviews your tax returns. It also shows that your company’s operations follow rules and are not personal spending disguised as business income.
Transitioning from understanding the importance of LLC resolutions for OnlyFans creators, let’s explore the specific situations where an LLC resolution is required or recommended.
When an LLC Resolution Is Required or Recommended
An LLC resolution is not always required by state law, but it is strongly recommended for major decisions. Most states do not require filing resolutions publicly, yet record keeping requirements still apply. Your operating agreement may also require documentation of important decisions.
Below are common situations where you should use one:
| Situation | Why It Requires Documentation |
|---|---|
| Opening a business bank account | Banks require proof of authority |
| Taking a loan | Lenders need formal approval record |
| Adding or removing LLC members | Ownership changes must be documented |
| Electing S Corp tax status | IRS elections affect tax year filings |
| Approving large purchases | Protects deductions and tax write offs |
| Changing profit percentage | Prevents disputes among LLC members |
Additional Common Actions Requiring an LLC Resolution
Resolutions serve as an internal, legally binding record for significant business activities, such as opening bank accounts, buying property, or adding members. Actions requiring a resolution include:
- Opening bank accounts
- Applying for business loans
- Authorizing large capital expenditures
- Buying, selling, or leasing real estate
- Signing significant contracts
- Appointing managers
- Hiring key employees
- Changing the company name
- Amending the Operating Agreement
- Filing patents
- Deciding on profit distributions
LLC resolutions are used in circumstances that entail financial risk and when buying or selling real estate, filing patents, and adding or removing company members. Major decisions requiring resolutions include opening bank accounts, buying/selling real estate, signing significant contracts, and changing management structure.
If your LLC makes decisions that affect money, ownership, or liability, you should document them. That written record protects your business entity.
How an LLC Resolution Protects You During Tax Season
An LLC resolution strengthens your position when filing OnlyFans Taxes because it supports your financial structure. Your gross income, net income, and business expenses all affect your tax bracket and tax bill. When you approve major deductions, you want proof that the expense had business use.
For example, if you deduct editing software, a home office deduction, or certain equipment, documentation helps show business purpose. The IRS looks closely at self-employed individuals with high taxable income. Supporting documents reduce questions about whether something was a personal expense or a legitimate business expense.
This matters because self-employment means taxes are calculated differently. You must pay self-employment taxes that include social security and Medicare. You also file Schedule SE and report business income separately. Clear documentation makes it easier to report accurately and stay compliant.
LLC Resolution and OnlyFans Taxes
An LLC resolution supports your OnlyFans taxes by proving how and why certain tax decisions were made. If you elect S Corp status, adjust owner compensation, or approve quarterly estimated taxes payments, those actions should be documented. The IRS expects consistency between your tax forms and your internal records.
OnlyFans income is self-employment income unless structured differently. That means you must pay quarterly estimated taxes if you owe more than $1,000 annually. An LLC member resolution can document approval to pay quarterly, adjust salary, or retain profit in the company.
For creators with high net income, this is not optional from a risk standpoint. Significant financial risk comes from poor documentation, not from high earnings. Proper record keeping protects your profit and strengthens your legal protection.
Single-Member LLC vs. Multi-Member LLC Resolutions
An LLC resolution works differently depending on whether you have one owner or multiple LLC members. In a single-member LLC, you are both the owner and decision maker. You still create a written record, even if you are the only signer.
In a multi-member LLC multi-member LLC, approval may require a vote. Your operating agreement usually defines voting percentage and rules. If your agreement requires 60 percent approval for certain actions, the LLC resolution should reflect that percentage and document who voted.
Even if you are self-employed and operate alone, creating a formal record separates you from the business entity. That separation strengthens your liability shield and supports good standing with state agencies and the bank.
What an LLC Resolution Should Include
An LLC resolution should contain specific elements to be valid and useful. It does not need complicated legal language, but it must be clear and precise.
A proper resolution includes:
- Full legal name of the LLC
- Date of the decision
- Clear description of the action approved
- Names of members or managers approving
- Signatures
- Statement referencing the operating agreement if applicable
The purpose is clarity. A vague resolution that does not explain the action weakens its value. Specificity protects you later.
Common Mistakes OnlyFans Creators Make
Even successful creators make structural mistakes inside their LLC. Most problems are not about income. They are about documentation and compliance.
Mixing Personal and Business Expenses
Many creators misunderstand how formal business documentation works. They focus on making money but ignore structure. Mixing personal expenses with business expenses is a frequent error that can weaken your legal protection and increase audit risk.
Lack of Documentation
Failing to document important decisions is another common mistake. Without a written record, you may have trouble proving authority or business purpose to banks, the IRS, or partners.
Incorrect Deductions
Breast implants, cosmetic procedures, and personal lifestyle costs are often misclassified as deductions. Without clear business use documentation, these deductions may be disallowed. That increases taxable income and means taxes owed rise.
Other Common Mistakes
- Opening a bank account without formal approval
- Changing profit distribution without written record
- Electing tax status without updating company records
In practice, this matters because when your tax returns are reviewed, the IRS compares your reported income, deductions, and tax obligations against your structure. If you claim business deductions but lack documentation, you increase the chance of a larger tax bill.
How an LLC Resolution Supports Long Term Growth
An LLC resolution supports long-term growth by creating discipline inside your company. As your OnlyFans business scales, your company begins handling more money, more expenses, and more compliance rules. Structured documentation protects profit and reduces conflict.
Many creators eventually hire assistants, editors, or contractors. Approving payments, contracts, or compensation structures should be documented. That strengthens internal controls and supports clear record keeping.
If you ever sell part of your business, seek investors, or restructure ownership percentage, your formal record history becomes valuable. Buyers and advisors look for consistency in documentation.
FAQs
What is a resolution in an LLC?
A resolution in an LLC is a written record that documents an official decision made by the company’s owners or managers. It confirms that the LLC approved a specific action, such as opening a bank account or electing tax status. The document stays in the company records and supports legal and tax compliance.
What does a company resolution mean?
A company resolution means the business has formally approved a decision through documented consent. It creates proof that the action was authorized under the operating agreement. This protects the company if disputes or tax questions arise.
What are some examples of a resolution?
Examples of a resolution include approving a loan, changing ownership percentage, electing S Corp tax treatment, or authorizing quarterly estimated tax payments. It can also document approval of large business expenses. Each example creates a formal record that supports compliance and tax reporting.
How do you write a company resolution?
To write a company resolution, include the LLC name, date, description of the decision, and signatures of approving members. The wording should clearly explain what action was approved and reference the operating agreement if required. The document should then be stored with official company records.
Conclusion
An LLC resolution is a simple but powerful legal document that protects your OnlyFans business by documenting important decisions and creating a formal record for your company. It strengthens compliance, supports OnlyFans Taxes reporting, and reduces audit risk by backing up major financial actions with written proof. As your business income grows, clear documentation becomes part of protecting your profit, maintaining legal protection, and staying compliant with IRS rules.
At The OnlyFans Accountant, we help creators structure their LLC properly and document decisions that protect their business and tax position. We guide you through compliance, OnlyFans Taxes strategy, and record keeping that supports long-term profit. Contact us today to review your LLC structure and make sure your documentation supports your income and goals.