'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,
· 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.
great information all business owners should know. I will be sharing this with others.ReplyDelete