If you have incorporated a business as an S Corporation or a C Corporation, most states require that you keep careful records of the company’s activities on a yearly basis. Every time your board of directors meets, your company needs to keep a record on file for regulatory compliance purposes.
There is a long list of possible transaction and resolutions that you might need to keep on record.
This can include anything ranging from:
The appointment of a new officer.
The resignation of a director.
Obtaining a line of credit/credit card in the company’s name.
Proper meeting minutes are essential to keeping your corporation in good standing and maintaining your personal liability shield. Before year end, your company must file the annual meeting minutes of the Board of Directors and Shareholders.
What Are Annual Meeting Minutes?
Meeting minutes keep an official account of what was done or talked about at formal meetings, including any decisions made or actions taken.
They are taken during a formal meeting of the board of directors or shareholders of a corporation, such as initial and annual meetings. Typically, meeting minutes are recorded by the corporation’s secretary (or another individual appointed at the meeting).
Annual Meeting Minutes of the Board of Directors
The board of directors for a corporation hold an annual meeting to go over the details of the past year and decide on actions and strategies of the corporation for the next year.
Even if you are a small business and a sole director or owner, it’s a good idea to even just take an hour or two at a coffee house and go over these items like a bigger corporation would do. The same fundamentals of goals, sales, money, and all big picture items are important to a corporation regardless of size. (It’s an even better excuse to go on a vacation for a few days and really think through it!)
The annual meeting for board of directors of a corporation should be documented on meeting minutes and included in the corporate record book. The decisions made at an annual board of directors meeting are important and should be documented with our free board meeting minutes template.
Some of the key issues to discuss are:
Officers of the corporation
The net and gross profit
The amount of dividend per share the corporation will issue
The salaries of the officers
Annual Shareholder Meeting Minutes
The shareholders of a corporation may hold an annual meeting to discuss the needs of the corporation, how the previous year was, and most importantly to elect the directors.
You can keep the same directors on the board of directors from the previous year, but this is your time to make changes if you would like. The board of directors typically are elected to serve on the board for 1 year, and/or until another meeting of shareholders is held to vote for new directors.
The directors are the decision makers of the corporation, so as a shareholder, this is an important duty. The directors elect the officers which run the day to day operations of the corporation. Any big decisions of the corporation are run by the directors, so as a shareholder this is your chance to choose who will make these decisions.
What Should be Included in the Annual Meeting Minutes?
Your meeting minutes do not need to include every little detail. You just need to document the key information and any decisions made or actions taken. In general, your minutes should be detailed enough to serve as your corporation’s “institutional memory.”
Typical minutes will include the following:
Basic information about the meeting: date, time, location.
Who attended, along with a special note in the cases where attendees came late or left early.
Agenda items with a brief description of each item.
Voting actions with a detailed account of how everyone voted, along with any abstentions.
Time when the meeting was adjourned.
What Should I Do With the Minutes After They’re Recorded?
Minutes do not need to be filed with the state, but can instead be kept with your other corporate records, such as articles of incorporation's, bylaws, and resolutions.
Like other documents, you should keep minutes on hand for at least seven years. Members of the corporation, such as shareholders, officers, and directors, are entitled to review the meeting minutes upon “reasonable request” to the corporation.
While you don’t need to file these documents with the state, they should still be considered important documents and are essential for protecting your corporation’s good standing and your limited liability status.