Resolution in Business: Everything You Need to Know
A resolution in business refers to a proposal made during a meeting of the company's shareholders or directors.3 min read
A resolution in business refers to a proposal made during a meeting of the company's shareholders or directors. It is discussed, and its approval represents an official confirmation of an action of any kind that will be taken by the company. There are four major types of resolutions: elective, extraordinary, special, and ordinary.
An example of a resolution in business is a company board's decision of reducing wages for its executives as a result of a long period of decreased profits, with the purpose of minimizing the company's overall expenses. A smaller scale business resolution would be a manager's decision to fire an employee due to bad performance.
Resolution in Business for a Limited Liability Company
Within an LLC, a resolution in business is a simple document describing the issue and proposed action that is to be taken, which then needs to be signed by the people in charge of a company. The document needs to contain the exact details of the issue. For example, in the case of a purchase, the resolution needs to specify exactly what is bought by the company and at what price. The document that describes the procedures for the limited liability company's everyday operations is called an operating agreement.
The way resolutions are approved or dismissed within a company is specified in its articles of organization. Typically, a vote takes place among the company directors and a majority vote is needed for the resolution to pass. The articles of organization need to be submitted to the same secretary of state office where the company was founded.
Conflict Resolutions and Their Use in Business
Conflict resolutions are passed to resolve any issues that may occur with customers, contractors, or employees. Finding ways for the company to deal with certain conflicts is a crucial step to maintain profits, productivity, customer satisfaction, and a good company image. The best results are achieved when resolutions are implemented before situations further escalate. The skill and determination with which the management handles conflicts are vital for the reputation of the company.
An approach that ensures long-term success is seeking a resolution that benefits all parties involved, instead of one that focuses solely on the benefit of the company. The reasoning behind that is avoiding long-term consequences of resentment from the other party that may generate future issues. Fully understanding the scope of the problem and viewing it from all sides is important for formulating a resolution that pleases everyone involved. Once an issue is resolved, steps must also be taken to make sure that the same issue will not occur again.
The Three Kinds of Dispute Resolution
There are three major types of resolving a dispute: mediation, arbitration, and litigation.
- Mediation is an attempt to resolve a dispute by bringing in a neutral party that analyzes the situation and has the goal of helping those involved to come up with a resolution that satisfies everyone.
- Arbitration also implies a third party analyzing the situation and hearing all sides. However, the difference between arbitration and mediation is that the former allows the neutral party to make a decision that everyone involved must accept.
- Litigation is the most commonly used way to resolve a dispute and it involves a judge, with or without a jury, analyzing all the evidence and making a binding decision. This type of dispute resolution is usually initiated by one of the involved parties, named a plaintiff, and it is taken against another party, referred to as a defendant.
Resolving Business Disputes Online
Professionals have created an alternative to litigation, motivated by the need for faster and more efficient ways of resolving business disputes. Online dispute resolutions combine mediation and arbitration, enabling the disputing parties to resolve their differences in a significantly shorter amount of time than through the court system. It is also significantly less expensive, due to the elimination of legal fees. Resolving disputes online has no geographical limitations, either.
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