Are Your Corporate Minutes Current?
May 1, 2019
Are your corporate minutes current? If you don’t want the IRS or one of your creditors to pierce your “corporate veil” and reach your personal assets it’s very important that your minutes and other documents be current.
What are corporate minutes?
Written record of key decisions discussed at meetings between a board of directors and/or shareholders of a corporation. Corporate minutes should be kept current and prepared annually by an attorney.
What are key decisions?
Legal, tax and financial decisions such as:
- Issuance of stock
- Purchase of real property and/or large assets
- Approval of a loan amount or substantial line of credit
- Federal or state tax elections
- Shareholder compensation
What are the risks?
Failure to care and feed your corporate legal entity leads to:
- Loss of limited liability protection of your corporate status
- Disregard of corporate existence by courts, thereby running the chance of personal liability for any corporate debts
- Loss of crucial tax benefits
- Controversy between shareholders over who agreed to what on important business decisions
When you treat your legal entity as legitimate, others will do the same. A “paper trail” eliminates uncertainty that you adhere to laws, regulations and legal requirements. This solid documentation provides a clear understanding of major corporate decisions and is crucial to the growth, health and financial position of any corporation.