Personal Injury Lawyer
There are many advantages to running a corporation. One of the biggest is the limited liability that a corporation provides. This protects your personal finances from going to satisfy business debts. To take advantage of benefits such as these, there is a trade-off. Corporations large and small have to comply with state regulations that govern them and meet certain minimum requirements. Regardless of where your corporation is located, the laws of your state require regular shareholder meetings and records of the meetings in the form of minutes.
How Often Are Shareholder Meetings Required?
The laws of all states require that corporations hold shareholder meetings on a regular basis. Some require annual shareholder meetings, while others may allow a corporation to set its own schedule as long as the meetings occur on a regular basis.
Corporations are not required to limit shareholder meetings to those that are scheduled regularly, however. Sometimes circumstances such as an impending merger may require the Board of Directors to call special shareholder meetings as needed.
The Board of Directors must send out notice of the meeting to shareholders in advance, giving them sufficient time to prepare for it, but not so far ahead of time that shareholders are likely to forget about it. Between 60 and 10 days prior to the meeting is considered a general guideline.
Shareholders are not required to attend the meetings. However, corporation bylaws or state regulations may set a quorum required for it to take place. A quorum is a minimum number of members required to be present to conduct any valid business at the meeting.
What Should the Minutes Contain?
Memory is notoriously faulty. If there is no written account of what goes on at a meeting, different members may remember it in different ways. Therefore, it is crucially important to keep an accurate record of the decisions made at a shareholder meeting. State regulations and/or corporation bylaws may require the secretary or other designated officer to take minutes to serve as the written report of the meeting.
Initially, the minutes should record substantive details about the meeting:
- Matters under discussion
- Results of votes
- Place and date it took place
- Names of shareholders present and absent
As the official record of the meeting, minutes of each should be stored in a safe location and retained for at least seven years. Those who attended the meeting should have the opportunity to make corrections and amendments in the interest of preserving accuracy.
You could lose limited liability protection if you do not comply with state regulations governing corporate operations. Contact a law office for guidance from a business lawyer, such as from Brown Kiely, LLP, on meeting requirements.