Basic Training: Keeping Up with Corporate Minutes . . . ProperlyBy Nina Kaufman, Esq.
As we’re still in the early part of 2010, it’s a good time for corporations (and LLCs!) to prepare their annual minutes. Minutes outline the major decisions the company made in the previous year. Not only are they a handy way of recalling the significant issues the company faced in the prior 12 months, they’re an important part of maintaining the limited liability advantages of having a business entity in the first place. In short, minutes protect your ass(ets)! 🙂
So, kudos this week go to my legal eagle Kathrine Gregory of the NYC kitchen incubator Mi Kitchen Es Su Kitchen. She brought to my attention a notice she received from “Corporate Records Compliance Office” concerning annual minutes. It looks all official, with serious-looking letterhead, and the kind of stuffy and stilted language that usually goes along with some kind of legal or governmental communication. And it asks for $120 to prepare your minutes.
Here’s what to watch out for with these kinds of services:
- They don’t come from a government entity. The disclaimer, probably printed in microscopic font, admits that. As official as these notices look and sound, they’re from another business wanting your money.
- Minutes don’t need to be filed. This is where the “officialness” of the notice can be misleading. I don’t know of any state that requires that business entities file their minutes with the secretary of state. You generally keep them with your other corporate records.
- They’re not sufficient. The questions these services ask tend to be few, and they center on changes to the officers or directors of the company. But those aren’t the only major decisions a corporation (or LLC) would make. Have a look at my article, “The Simple But Powerful Reasons for Corporate Minutes,” to find out what kinds of transactions and activities are considered “major.”
Based on that, it’s not a wise expenditure of money. Yes, an attorney may cost a little more, but you’ll know that your minutes are done properly. Plus you’ll have the benefit of having an advisor on board to work with proactively.
Gotten any legal-looking notices that puzzle you and don’t seem quite right? Become a “legal eagle” and let me know by commenting on Making It Legal!
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