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Monday, December 6, 2010

Write Offs or Waste of Time?

We've covered the big questions about Annual Meetings, but here are three other questions we get every so often.  Hopefully you'll feel like an expert about Annual Meetings after reading these three blog posts!

·        Can I really go on vacation and call it my “Annual Meeting” in order to write it off?
Yes . . . and No.  Don’t buy the plane tickets for your family to fly to Fiji just yet!  Conducting a business meeting while on vacation does allow for certain write offs of business expenses on taxes. However, you should consult with your CPA to determine which expenses can be written off as legitimate business expenses. Typically, the write off isn't as exciting as you'd hoped . . .

·        Who looks at this stuff anyway?  It seems like such a waste of time!
Like most things with details and the government, a little work up front saves you a lot of pain in the long run.  As for who should look at the Annual Meeting documents: the business owner should review the documents regularly and government auditors will certainly ask for the completed Corporate Record Book if (or when) you are being audited. 
There are other people important to the future of your business who will want access to your Annual Meeting Minutes and Corporate Record Book! Banks should (and often do) review these documents to assess the risk of lending to your business.  Your insurance or risk management advisor should also be reviewing the documents often to ensure they are covering your business’ needs.

·        If we grow, do I need to include more people in the meeting?
Who is included in the meetings is entirely up to the ownership/management group.  All Shareholders and Directors should attend, as well as any outside advisors that the business ownership group would like to have present.  Ad your business grows, you may add Shareholders or more likely additional Directors.

Monday, November 29, 2010

Going Retro

Not holding Annual Meetings is definitely a common theme for small businesses, but it is critically important to keeping the corporate sheild in tact.  Once a small business owner understands the risks involved in NOT holding (and documenting) Annual Meetings, they start to panic a bit, "Okay, so now I understand why we “Should” hold an Annual Meeting, but I haven’t done it since we opened!  What now?".   This is a case where going Retro can work in your favor . . .

·        It’s been 5 years since  . . .isn’t it too late?
Start today and move forward.  Because it’s overwhelming, most businesses in this situation are likely to turn to an advisor. Regardless, it is never too late to get started.

·        Can I retroactively hold meetings for the last 5 years of not having meetings?
Yes, provided that you sign and date all documents currently so that you are not acting in an unethical manner.  You are simply stating that while these decisions were made in the past, you simply got around to documenting them recently. It's not as ideal as having Annual Meeting documents from each year, but it's much better than being audited without any documentation in place. So, you CAN go Retro (minus the liesure suit) as long as you aren't falsifying documents. 

Tuesday, November 23, 2010

Begin A New Holiday Tradition: The Annual Meeting

'Tis the season for Giving Thanks, signing Christmas Cards, and . . . Strategic Planning!  Most businesses have at least an informal planning process that happens between now and January.  This planning process is actually a great time to begin the tradition of your corporate Annual Meeting!  

"Okay, but I don’t REALLY need to have an actual Annual Meeting, right?"

If you’re an owner-operated business, it’s likely that you’ve slacked-off a bit in holding and recording your required Annual Meetings.  This is especially true when the shareholders include you and . . . just you! Regardless of how small (or large) you are, you are required to hold an Annual Meeting and have documentation of those meetings. 

An Annual Meeting is a review of the previous year’s business activities by the Board of Directors and Shareholders of a Corporation or the Board of Governors and Members of an LLC.  Conducting regular reviews of all business activities and properly documenting these reviews is vital to maintaining personal and corporate separateness.  In short, the Annual Meeting is a key piece of armor in protecting the integrity of the Corporate Veil.

Over the next few blogs, I’ll answer common questions about Annual Meetings. Today, we’ll cover meeting logistics:

·        What is typically included in an Annual Meeting?
A regular review of business activities and will differ from business to business.  Some examples of review items include:
Re-appointment of Directors or Governors and re-election of Officers
Approval of Major Purchases
Approval of any new loan or lease agreements
Changes to compensation or benefit packages
Approval of change of office address request
Decisions around locations and branches
Approval of authorized agent activities (CPA, Attorney, Insurance Broker,
Banker, etc)

·        What should the minutes look like?
Minutes should contain very specific language with formal resolutions that are confirmed, approved and ratified.  The typical business owner is usually unfamiliar with the type of language and structure that formalized documents should contain—an experienced advisor can assist in this area. However, I’ll also post a few examples of Annual Meeting minutes to give you an idea of what is included.

·        Where do I keep the minutes?
Every business is required to keep a Corporate Record Book and it is to reside at the principal office of the business.  This Book can be physical, or virtual, provided it is available or can be accessible at the registered office location.

·        What kind of evidence should there be meeting?  Are minutes enough?
The minutes of the meeting are certainly important in proving that a meeting occurred.  You can also keep copies of the meeting agenda and the waiver of notice, as well as any receipts for expenses associated with the Annual Meeting.
 In the next blog, I'll cover the question we get asked all the time: "So, I've been in business for five years and have never held an annual meeting . . . now what?"  There are effective solutions for this common corporate issue!  Stay tuned . . .

Monday, October 4, 2010

HIR Changes Name to Meet Growing Need

Safe Shield Develops Customized Compliance Software

ST. CLOUD, Minn. (Oct. 11, 2010) - Product growth and market expansion led HIR Companies, LLC to change its name this month to Safe Shield LLC. Safe Shield is developing new compliance technologies that it will unveil later this year.

“While the HIR name has served us well, our clients’ needs are changing and so are we,” said Kent Gustafson, CEO of HIR/Safe Shield. “Under the Safe Shield name, customers will receive the security and trusted advisor services they’ve come to expect from HIR, plus advanced technology and customizations to meet their diverse needs.”
A need for a more customizable compliance solution led Gustafson to develop a new tool for business clients. Safe Shield will launch the Internet-based technology later this year. “This transition, as well as the name change will be seamless for our customers, with no business interruptions, and it means we’ll be able to provide them even better services,” Gustafson said.

The past 18 months have brought significant business growth to HIR, creating an increased need to expand business compliance services to new markets. “More businesses are seeing a need for our compliance services for sustainability and future success,” Gustafson said. “We’ve seen considerable growth in revenue over the past year as we welcome new customers and take pride in our almost perfect retention record.”

HIR, based in Sauk Centre, provides corporate record compliance and corporate document management services to small and medium sized businesses in Minnesota. The company’s mission is to help business owners maintain corporate compliance status. It identifies and implements best practices for documenting the activities of the business and provides secure electronic record retention and backup for required business records and documents.