Search thinkILG.com
Employment Posters Guide

Download the 2018 employment posters required by State and Federal law for free.

Login
« National Publicity for LegalBriefs | Main | How to Fire a "Bulletproof" Employee »
Thursday
Feb152007

Annual Meetings Done Right!

Whether your business entity is a corporation, a limited liability company, a partnership or even a sole proprietorship, you should hold an annual meeting once a year with your accountant and your lawyer. First, there are formalities that need to be observed in order to ensure that you receive the tax treatment and legal protections for your form of organization. There are also certain actions that you must document appropriately in order to prevent problems. An annual meeting can be more than that, by discussing recent changes in the laws, challenges faced by your business and your plans for the future, your accountant and lawyer can help you avoid problems and seize new opportunities.

Many business people go somewhere, write some things down on a piece of paper and call it an annual meeting. We have seen a lot of problems result from this type of "annual meeting." They can fail to observe all the necessary formalities and put their business organization at risk, they can fail to properly document actions they have taken and they do not get the benefit of discussing new laws, current challenges and future plans.

It is important 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 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 organization (Shareholders, Partners or Members)?

-  Has there been any change in the directors, managers or managing partners?

-  Has there been any change in the bank used by the organization?

-  Has the business entity refinanced a debt or obtained new financing?

-  Has the organization 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 business entity purchased any real property (land or buildings)?

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

-  Has the business entity sold or agreed to sell the business or any significant line of the entity’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, partners, members, officers, managers or directors?

-  Has the organization granted any bonuses to any employees that are also shareholders, partners, members, officers, managers or directors?

-  Have any dividends or distributions been declared or paid?

-  Has the business entity 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 organization leased or purchased a vehicle to be used by an officer, director, manager, shareholder, partner or member of the organization? 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 proper annual meetings.

PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
All HTML will be escaped. Hyperlinks will be created for URLs automatically.