What You Need To Know About Corporate Meeting Minutes

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What You Need To Know About
Corporate Meeting Minutes

Corporate meeting minutes are a formal record of a company's actions and decisions.

What purpose do they serve?

Corporate meeting minutes might sound like a silly formality, especially for a small business owner. After all, if your company is comprised of you and your two employees, you aren't likely calling shareholder meetings or assembling a board of directors.

Why are they important?

Most states require corporations to keep meeting minutes. This is usually done at least once a year. That being said, if your company's by-laws or articles of incorporation stipulate more frequent meetings, you are required to document those as well.

Liability protection It is not uncommon for a business owner to structure their business as a corporation, LLC, or partnership partly for the liability protection. However, that protection can be compromised if a company's owners cannot provide evidence that the business was kept separate from its owners. This means that creditors and courts would be able to go after individual owners.

Your tax standing In case of an audit, you need to be able to produce your corporate meeting minutes. The IRS will check that you have followed the tax rules for your entity type, and this is one of the rules you are required to follow. In fact, if the IRS finds that you have not been treating your business as a separate entity, they can reclassify your business, which could cause you to owe significant taxes and penalties.

Prove your business expenses Let's say your LLC wrote off travel to meet with potential buyers or investigate real estate. Producing meeting minutes that include a decision to do so could be used as evidence that the expense was indeed related to business.

Attract investors Showing clean, maintained meeting minutes gives a clearer picture of the way the company is managed. It can build investors’ confidence in your company and could even boost your company's worth.

Need help maintaining your business' meeting minutes? Click here to schedule an appointment with one of Gold Standard's seasoned tax accountants.

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