MINUTES, RESOLUTIONS, AND CORPORATE BOOKS
Owning and running a business is a challenging and time-consuming task, no matter its size. You are constantly being pulled in a number of different directions, have a long list of things to accomplish, and revenue goals to hit. So it should come as no big surprise that maintaining your corporate minutes, having shareholder meetings and updating your corporate books is not on the top of any business owner’s priority list.
Unfortunately, corporate record keeping is a boring task filled with formalities and minutia. It also feels particularly silly when the business is owned by less than three people. But the law requires you to keep it up, and failure to do so can result in a number of nasty surprises. Like a lawsuit, audit or dispute with your partners or creditors.
The most obvious of these consequences is personal liability attaching to the business owner (failure of the corporate form). Other problems include suspension of the corporation (and its legal rights and contracts) or liability for fiduciary failures.
Depending on your business needs, you may be required to adjust your corporate books or operating agreement (if you are an LLC), or take certain financial and legal actions, such as opening a bank account or securing financing. You will be required to update everything when you bring on new stockholders as well.
You can buy corporate minutes as forms with fill-in-the-blanks, but such forms are more easily pierced and will not account for your specific business needs. We recommend having your business law attorney put you on an automatic maintenance schedule to keep up your corporate “minute book” and make regular, required filings with the Secretary of State.
A minute book serves as a legal journal, documenting your business’ ongoing corporate activities, decisions, and significant business transactions. It acts as the business’ official repository of all major corporate documents and records. For instance, the minute book should state past and present officers and directors of the business and the dates when they held these positions. The minute book will also outline all of the business’ stock information, including the types and numbers of stocks purchased and sold, the names of the stockholders, and their dates of ownership. Where applicable, the minute book will also note the payment of dividends to shareholders and compensation to management personnel.
Put our Business Savvy Attorneys to Work for your Business
Allowing our business attorneys to handle these tasks, in the long run, is the surest and most cost-effective means of protecting your business from future costly problems. Bellatrix will provide you and your team with the peace of mind that only comes from 100% asset protection. To sign up for our annual corporate maintenance service, contact us or call (800) 449-8992. And if you are not sure what state your corporate records are in, consider a Business Risk Review before something blows up.