Organizational meeting minutes, otherwise known as corporate meeting minutes or simply meeting minutes, are a formal record of the discussions, decisions, and actions that your company chooses to make. These decisions are usually made at shareholder meetings, board of director’s meetings, annual meetings, and board committee meetings, but you should document any important company decisions regardless of when they are made.
Why Keep Meeting Minutes?
Meeting minutes record when decisions or actions are taken by your company and explain why such decisions or actions were taken. Meeting minutes also serve to show that the board members, shareholders, managers, or members were informed about the issues and agreed to the decisions made. They can help prevent later internal disputes, protect your tax standing, and show potential investors that your company is managed responsibly.
Probably the most important reason to keep meeting minutes is to prevent veil piercing and protect your personal assets. While one of several factors a court would consider when deciding if your LLC, corporation, or partnership should be treated as such or considered your “alter ego,” meeting minutes show that the business, rather than the individual owners, made the business decision. If a court allowed for veil piercing, creditors could potentially gain access to your personal assets even if the company is sued and not you in your personal capacity. Additionally, the company owners may be held personally liable for the business’s debts.
Keeping meeting minutes can also prevent internal company disputes as they document when and why a decision was made. Therefore, months later if and when it turns out that the decision may not have been the best for the company or there’s disagreement on how much stock was sold to someone, there’s a company record in existence which is easily referable.
Meeting minutes can also assist with maintaining your business entity tax classification in case your company is audited by the IRS. If you do not document your company’s business decisions correctly, especially ones dealing with deductible expenses, the IRS may reclassify your business’s tax status.
Meeting minutes can assist with an assessment of how much your business is worth in the event you are considering selling your business. Additionally, keeping meeting minutes gives investors a better sense of how well the company is managed by the board of directors or managers.
What Should I Include in My Meeting Minutes?
You don’t necessarily need to record routine business decisions in your meeting minutes, but you need to pay attention to what your bylaws or operating agreement require you to include. You should certainly include any decisions that are made that require the consent of the officers or board of directors of the company. Some examples of decisions that you should document include: appointments of members or managers, loan or credit applications, appointment of officers, election of board members, buying, selling, or issuing stock, and company insurance purchases.
How Do I Record Meeting Minutes?
Generally speaking, meeting minutes should at the very least include the company name, date and location of the meeting, type of meeting (for example, annual or special meeting), names of both those persons in attendance and not in attendance, and a statement about whether enough people were in attendance to make decisions. While meeting minutes do not have to be recorded with the Secretary of State, once drafted and accepted, meeting minutes should be kept in a secure location for at least seven years in the event of an audit.