Lack of Minutes Means Loss of Personal Assets


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6-22-11

You’ve undoubtedly heard Megan Hughes and I talk about the need for adequate minutes for shareholder and director meetings. Yes, there are two sets of minutes that are needed. You can get templates for these in The 60-Minute Handbook

In the case of Temple v. Bodega Bay Fisheries, some business owners found out how important minutes were. Unfortunately, they found out the hard way when the court pierced right through the corporate veil and seized personal assets.

Usually you think that a corporation is going to protect your personal assets. After all, that’s one of the biggest reasons why your form an LLC or a corporation – to protect your assets. The problem is that you responsibility to the corporation doesn’t stop there. You must also follow corporate formalities which includes keeping adequate minutes.

Some of the things you need to include in your minutes are:

  • Electing corporate officers,
  • Adopting business policies and plans,
  • Designating committees and assigning authority,
  • Issuing and selling stock,
  • Approving sale, lease, exchange, transfer or other disposition of corporate property and assets
  • Approving mergers and reorganizations,
  • Approving employee benefit plans, and
  • Approving corporate loans.

That’s just a few of the many items you need to keep track of in your annual meetings. Don’t neglect to keep the minutes or you may find your personal assets are completely at risk.



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