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Thursday
Jan312002

Document the Important Business Matters in Minutes of Annual Meetings

The last issue of LegalBriefs discussed how important it is for corporations and limited liability companies to hold annual meetings. The actions of business entities such as these are documented in minutes of meetings or consents to actions signed by all of the parties involved in the business organization.

A common question is "what type of action should we document?" To help you prepare for your annual meetings, we created a checklist of the types of activities that should be documented. Your answers to these questions can help you have an effective and efficient annual meeting that helps protect both you and your business organization.

Annual Meeting Checklist

- Has there been any change in the ownership of the corporation or LLC (Shareholders or Members)?

- Has there been any change in the Directors of the corporation or Managers of the LLC?

- Has there been any change in the bank used by the corporation or LLC?

- Has the corporation or LLC refinanced a debt or obtained new financing?

- Has the corporation or LLC entered into any leases of real property (land or buildings)?

- Has there been any modifications, revisions or amendments to any real property leases?

- Have you exercised any options to renew a lease or options to purchase leased premises?

- Has the corporation or LLC purchased any real property (land or buildings)?

- Has the corporation or LLC purchased or agreed to purchase the business or some or all of the assets of another business?

- Has the corporation or LLC sold or agreed to sell the business or any significant line of the corporation's or LLC's business?

- Has there been any major equipment purchases?

- Has there been any major equipment leases?

- Has there been any change in the salaries of any employees that are also shareholders, officers or directors?

- Has the corporation or LLC granted any bonuses to any employees that are also shareholders, officers, directors or members?

- Have any dividends been declared or paid?

- Has the corporation or LLC started, changed or terminated any employee benefits or employee benefit plans (including but not limited to medial, dental, retirement, disability, medical reimbursement, etc…)?

- Has the corporation or LLC leased or purchased a vehicle to be used by an officer, director, shareholder or member of the corporation or LLC? Does the corporation or LLC intend to purchase any such vehicles?

Even if you answer no to each of the checklist items listed above, you still need to have an annual meeting to document those answers.

If you have not yet scheduled an annual meeting with your lawyer or accountant, do so now. This is the type of annual preventative maintenance matter that can get overlooked. If it is overlooked and there is ever a dispute between owners, an IRS audit or a liability lawsuit, you will have wished you had taken the time to conduct annual meetings.

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