Corporate Meeting Minutes: Act Quickly Before the Year Ends to Stay in Compliance

Holding an annual meeting and recording meeting minutes are among the yearly business compliance responsibilities that entrepreneurs may need to fulfill. With the end of the year approaching quickly, it’s crucial that business owners act soon if the annual meeting and minutes requirement applies to them.  

Is your business required to hold an annual meeting?

It depends. Businesses set up as limited liability companies (LLCs) and corporations may need to hold an annual meeting with their owners. Generally, states require all C corporations to conduct a yearly shareholder meeting. While LLC annual member meetings aren’t typically state mandated, an LLC will need to hold a meeting each year if its LLC operating agreement requires one.

Corporations and LLCs that have elected S corporation status for tax purposes must follow their governance documents and state’s rules for the underlying entity. In other words, an LLC that has elected taxation as an S corporation must hold an annual meeting and record minutes if its operating agreement requires it.

Likewise, a C corporation taxed as an S corporation must follow its bylaws and state’s annual meeting rules for C corporations.

So, what purpose does a corporate or LLC annual meeting serve? These meetings provide an opportunity for the business’s owners to discuss and vote on important company issues. Examples of topics that the attendees might discuss:

• Recent business accomplishments and business activities
• Business goals and objectives
• Approval of previous year’s meeting minutes
• Financial performance (e.g., sales results, profit and loss, etc.)
• Election of new board members
• LLC resolutions to be approved by the LLC members 
• Board of director’s decisions and actions (applies to corporations)
• Proposed changes to governance documents (corporate bylaws or an LLC’s operating agreement) 

What goes into annual meeting minutes?

Meeting minutes serve as a written record of what occurred at a company’s annual meeting. The rules for recording and handling annual meeting minutes vary from state to state and according to an LLC’s operating agreement or corporation’s bylaws.

Corporation meeting minutes

Most state governments require companies registered as C corporations to hold annual shareholders’ meetings and record minutes. A corporation’s bylaws set forth specific rules for conducting meetings. Some examples include: how and when notice of meetings will be given to shareholders (some states establish minimum time frames), the order of business addressed, and the minimum number of shareholders that must be present (“quorum”) to hold a vote.

Examples of information captured in corporate annual meeting minutes

• The meeting’s date, time, and location 
• Names of the persons who attended the meeting and who was absent
• Who recorded the minutes (usually, a business’s corporate secretary performs this task)
• Meeting agenda and a brief description of each item
• Details about what attendees discussed
• Results of voting actions
• The time the meeting ended

After a corporation’s annual meeting minutes are approved per the company’s bylaws’ rules, the business should keep the original executed copy in a safe place along with other corporate records (e.g., its articles of incorporation, bylaws, and resolutions).

In addition to the required yearly meeting, a corporation may need to hold special shareholders’ meetings to approve significant decisions and actions. For example, this might happen if the company’s directors propose a merger or a conversion to a different business entity.

Also, corporations must hold board of directors meetings (usually, at least once every year) to make strategic plans and decisions, like issuing stock, incurring new debt, and declaring dividends. Some corporations hold their annual board of directors meeting in conjunction with their annual shareholder meeting. 

Examples of information captured in LLC annual meeting minutes

An LLC’s operating agreement will describe how members should conduct meetings and any rules for the execution of meeting minutes. Even though states don’t require annual member meetings, it’s helpful for LLCs to include them in their governance. They are one measure for demonstrating that the LLC’s owners treat the company as a legal business entity. And that’s crucial for maintaining the corporate veil that protects LLC members’ personal assets from the company’s legal liabilities.

Items often found in LLC annual meeting minutes include:

• Date, time, and location of the meeting
• Name and title of the person who wrote the minutes
• The names of individuals in attendance
• Brief description of meeting agenda items
• Details about what the attendees discussed
• Decisions made and voting actions taken
• The time the meeting adjourned

All persons who attend an LLC annual meeting should have an opportunity to review and request changes to the minutes before the minutes become an official part of the company’s records.

More articles from AllBusiness.com:

• What Are Corporate Bylaws and Why Are They Important?
• Should Your Corporation Adopt Bylaws?
• 10 Frequently Asked Questions About LLCs
• How to Form an LLC
• Organizational Resolutions for a Corporation

How long should you retain meeting minutes?

The recommendations vary. Maintaining them as part of the company’s permanent record is ideal. However, many experts advise keeping minutes for a minimum of seven years. LLCs and corporations should make past meeting minutes available to their owners and stakeholders upon reasonable requests to review them. 

What can you do if you’re behind schedule on your annual meeting and minutes?

When the end of the year is near, it’s important for business owners to hold their required meetings if they haven’t checked it off their list yet. Failure to tackle compliance requirements, including annual meetings and minutes, on time can lead to fines and other penalties. And there are potential legal implications of not following through.

Annual meetings (and recorded meeting minutes) are essential requirements for maintaining a business entity’s good standing with the state and maintaining the protective corporate veil that shields owners from personal liability. 

Research and know your responsibilities

LLC and corporation owners should research their state’s laws and review their company’s governance documents to learn what they must do by year’s end. It can be beneficial for business owners to talk with an attorney as well, especially when unsure of their responsibilities or if they have fallen behind on their meeting obligations. 

RELATED: End-of-Year Business Compliance Checklist for Entrepreneurs