Minutes

PURPOSE OF MINUTES

Paper Trail. Minutes create a paper trail that shows auditors (IRS) and litigates (Courts) that a business is, in fact, a fully operating and compliant business. Without minutes, Limited Liability Companies and a Corporations have been stripped of their business status and owners and officers penalized, higher taxes assessed, and liability protection removed. It is extremely important that any LLC or Corporation, no matter how small, even a one-person entity, keep minutes of decisions and major actions.

Written Record. Your LLC or Corporation must have a written record of all important decisions (either by the Members/Managers or by the Shareholders/Board of Directors). Failure to keep minutes up to date and resolutions documented can have serious consequences, especially with the IRS and courts, Many LLCs and Corporations that are non-compliant (up-to-date with records and minutes) are disqualified and members and shareholders left with extensive tax obligations,

THERE ARE TWO TYPES OF MINUTES

Formation Minutes
LLC: The meeting held to decide upon the name of the company, the members, registered agent, company shares, capital investment, and other formation and organizing issues. At this meeting, the Operating Agreement is covered and agreed upon by the initial, forming members. In addition, it will be decided at this meeting whether the LLC will be a member-based and run company, or whether it will be a manager-based and run company. Lastly, it will be decided who will fill what roles: members, managers, officers, such as Treasurer and Secretary. All decisions (resolutions) must be dutifully recorded and the minutes signed by the authorizing member.
Corporation: The initial meeting to form a corporation is similar in nature and content to that of the Limited Liability Company, except that Shareholders (not members) make the decisions, Directors are appointed, and Officers elected. After you form your corporation, make sure to call and organize regular shareholder and director meetings, as well as document important corporate resolutions (decisions).

Regular Minutes
LLC: When members (or managers) meet, you must prepare minutes to document any actions taken at the meeting. Generally speaking, these minutes may be brief and cover basically the resolutions agreed upon by the members.
Corporation: When Shareholders, or Directors, or Officers meet to discuss corporate business, either in annual, semi-annual, quarterly, or special type meetings, Minutes should be kept of decisions made.

COMPANY DECISIONS

Pre-Meeting: Determine whether a meeting is an actual, physical meeting of those involved, or just a “paper” meeting. Call and organize meetings, authorize key transactions and keep your records up to date

Primary Paper Trail: Meeting minutes are the primary paper trail of a company’s legal life, it's important to know when and how to prepare these minutes, and they should definitely include major company or corporate decisions, from entering into a contract to opening a bank account. This list should include:
• Meeting Summary Sheets
• Call of Meeting forms
• Meeting Participant Lists
• Notice of Meeting forms
• Waiver of Notice forms
• Acknowledgment of Receipt of Notice of Meeting
• Certification of Mailing forms
• Shareholder Proxy forms

Minutes Should be kept for the following meetings. There are numerous types of meetings help by a Limited Liability Company or a Corporation. Minutes must be kept of each meeting.
• Minutes of Annual Meeting of Members
• Minutes of Special Meeting of Members
• Minutes of Annual Meeting of Managers
• Minutes of Special Meeting of Managers
• Minutes of Annual Meeting of Directors
• Minutes of Special Meeting of Directors
• Minutes of Annual Meeting of Shareholders
• Minutes of Special Meeting of Shareholders

A Minutes Record should be kept of the following actions. Every decision made by the members, managers, and officers of an LLC, or of the Shareholders, Directors or Officers of a Corporation should be kept.
• Approval of Minutes of Members Meeting
• Approval of Minutes of Managers Meeting
• Approval of Minutes of Shareholder Meeting
• Approval of Minutes of Director Meeting
• Authorization of Treasurer to Open and Use Accounts
• Authorization of Treasurer to Open and Use Specific Company Accounts
• Authorization of Company Account and Designation of Authorized Signers
• Authorization of Rental of Safe Deposit Box
• Adoption of Assumed Company Name
• Member Approval of Proposed Contract
• Approval of Lease
• Purchase of Real Property
• Resolution Authorizing Sale of Company Real Property
• Approval of Company Tax Year
• Payment and Deduction of Organizational Expenses
• Written Consent to Action Without a Meeting
• Certification of Member or Manager Action
• Affidavit of Member Decision-Making
• Acknowledgments
• Board Approval of Transaction Benefiting a Director
• Directors' Written Consent to Transaction Benefiting a Director
• Shareholder Approval of Transaction Benefiting a Director
• Shareholder Written Consent to Transaction Involving a Director
• Certification of Board or Shareholder Action
• Affidavit of Corporate Decision-Making

Important to Know
LLCs and corporations are the most used form of business entities in the United States. While many people form one of these entities, most do not understand the corporate minute requirements.
• A valid meeting cannot be held without a quorum. A quorum is the minimum number of members or directors who must be present to hold a valid meeting and take action.
• Minutes must be kept at all meetings of Members, Managers and Officers of an LLC
• Minutes must be kept at all meetings of Shareholders, Directors, Officers and Managers of a Corporation

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