Did you know?

Your corporate minutes must be updated if you:

  1. open a bank account
  2. increase your salary or that of key employees
  3. sign a lease, or
  4. simply let a year pass

In this litigious world, corporate responsibility and governance is red-hot and you can’t afford to risk your personal assets by neglecting your corporate entity. Do not jeopardize the protection of your “corporate veil” and expose your personal assets by ignoring your obligation to prepare corporate minutes and other required records.

The California Corporations Code mandates that all corporations keep adequate and correct books and records of account. This covers all minutes of the proceedings of its shareholders, board and committees of the board. Keeping accurate and timely minutes is not only the law, it makes good business sense. Documenting important decisions might prevent hasty, ill-considered decisions. Secondly, if you document the reasons for important decisions and memorialize each director or shareholder’s part in them, you can prevent any misunderstandings or disagreements later on.

Landlords, property management companies, banks, trusts, escrow and title companies, and other institutions often ask corporations to submit a copy of a formal shareholder resolution approving a transaction that is being undertaken, such as a loan, purchase or rental agreement. This documentation can show your creditors, suppliers, the IRS and the courts that you acted appropriately and in compliance with applicable laws, regulations or other legal requirements.

The bylaws of most corporations require their board of directors to have an annual meeting. Small corporations often have informal “meetings” where these matters are decided. Even though the meeting may be informal, corporate officers must still prepare meeting minutes or unanimous written consents that approve the actions.

In addition to holding annual meetings and keeping minutes, corporate officers are required to keep accurate records of stock transfers and of shareholders. These topics are discussed further in the website. Please click on the links below or go to the navigation bar above, hover over “Corporate Records Law” and select one of the links there to find a more detailed discussion of these topics, as well as excerpts from the California Corporations Code.


LINKS:

BOOKS OF ACCOUNT FOREIGN CORPORATIONS
BYLAWS RECORDS OF SHAREHOLDERS
CALIFORNIA CORPORATIONS CODE KEEPING THE RECORDS
CORPORATE MINUTES

THE FOREGOING IS ONLY A GENERAL SUMMARY OF CALIFORNIA CORPORATIONS LAW OR A PORTION THEREOF, AND DOES NOT PURPORT TO BE AN ACCURATE OR COMPLETE STATEMENT OF THE LAW APPLICABLE TO CORPORATIONS IN CALIFORNIA. IT DOES NOT CONSTITUTE A LEGAL OPINION. INDIVIDUAL SITUATIONS MAY VARY. FOR AN ACCURATE LEGAL OPINION, ALWAYS CONSULT AN ATTORNEY.