Along with other annual business compliance responsibilities, corporations (and sometimes LLCs) must hold various meetings and record minutes from those meetings. With the new year ahead, new entrepreneurs and existing business owners need to make sure they understand their responsibility to hold annual meetings and draft meeting minutes.
Meetings that Require Keeping Minutes
- Corporate annual shareholder meeting (sometimes called “annual general meeting”)
- Board of directors meeting
- LLC annual member meeting
Although not required, many organizations use Robert’s Rules of Order for facilitating discussion and making decisions during their meetings. It can be helpful for business owners to consult with an attorney about how best to conduct their meetings to comply with their state’s laws and their company’s bylaws or LLC operating agreement.
Companies Who Have to Keep Minutes
Meeting minutes serve as a written record of what occurred at a company’s annual meeting. Generally, states require all corporations to hold a yearly meeting with their shareholders. States don’t typically mandate LLCs (limited liability companies) to conduct annual meetings with their members. However, a company must do so if its LLC operating agreement says so.
C Corporations and limited liability companies that have their taxes treated under S Corporation election typically don’t have any special S Corp-related rules for meetings and minutes. They must abide by their state’s laws for the legally formed underlying business entity and their company’s governance documents (corporate bylaws or LLC operating agreement) rules for annual meetings and minutes. For example, an LLC with S Corp election must hold an annual member meeting and record minutes if required in its operating agreement. Similarly, a C Corporation with S Corp election must follow its bylaws’ rules and the state’s laws regarding annual meetings for C Corporations.
Corporations must also hold at least one board of directors meeting during the year. The board of directors is an elected group of individuals responsible for making strategic decisions and guiding the overall direction of an organization.
Topics Member Meetings Cover
Annual meetings provide an opportunity for business owners and other stakeholders to discuss and vote on important company issues.
Possible Topics Discussed at Annual Shareholder Meetings
- Recent successes, business activities, industry updates, challenges
- Business goals and objectives
- Review of previous year’s meeting minutes
- Financial performance (e.g., sales results, profit and loss, etc.)
- Election or removal of board members and officers
- Appointment or re-appointment of auditors
- Board of Directors’ decisions and actions
- Proposed changes to incorporation or governance documents (articles of incorporation, bylaws)
Possible Topics Discussed at Annual LLC Member Meetings
- Recent successes, business activities, industry updates, challenges
- Business goals and objectives
- Review of previous year’s meeting minutes
- Financial performance (e.g., sales results, profit and loss, etc.)
- LLC resolutions to be approved by the LLC members
- Proposed changes to formation and governance documents (articles of organization, LLC operating agreement)
Possible Topics Discussed at Board of Directors Meetings
- Election of corporate officers (at the first board meeting)
- Adoption of bylaws (at the first board meeting)
- Evaluation of the company’s financial performance
- Company policy updates and issues
- Whether to distribute stock dividends
- Hiring and firing of key corporate employees
Details Listed in Annual Meeting Minutes
A company’s bylaws may describe what information the corporation’s minutes must capture, the format for structuring minutes, who must approve and sign minutes, and other specifics.
Examples of Details That Might be Recorded in Corporate Minutes
- The corporation’s name
- Scheduled meeting date and time
- Meeting location
- Attendance (Names of the persons present at the meeting and who was absent)
- Who ran the meeting (i.e., the individual elected as chairperson to guide the discussion)
- Who recorded the minutes (usually, an elected corporate secretary performs this task)
- What time the meeting was called to order
- Meeting agenda
- Confirmation of sufficient notice (verifying that appropriate notice was given to shareholders)
- Confirmation that a quorum was present (minimum number of shareholders to vote on matters during the meeting)
- Details about what attendees discussed during the meeting
- Approval of prior meeting’s minutes
- Financial performance and other updates presented at the meeting
- Decisions made about transactions, resolutions, or actions that require vote or consent
- Motions presented or passed during the meeting
- Results of director and officer elections
- Other business matters that were addressed
- The time the meeting ended
- When the next annual meeting will be held
- Signatures of the meeting secretary and other officers or shareholders at the meeting
- Appendix with financial statements and other reports
An LLC’s operating agreement may describe how members should conduct their meetings and any rules for preparing and executing minutes.
Examples of Details That Might be Recorded in LLC Minutes
- The LLC’s name
- Scheduled meeting date and time
- Meeting location
- Attendance (Names of the persons present and absent)
- Who ran the meeting
- Who recorded the minutes (usually, an elected corporate secretary performs this task)
- Meeting agenda
- Details about what the attendees discussed
- Approval of prior meeting’s minutes
- Financial performance and other updates presented at the meeting
- Decisions made about transactions, resolutions, or actions that require vote or consent
- Motions presented or passed by members during the meeting
- Other business matters that were addressed
- When the next annual member meeting will be held
- Time the meeting adjourned
- Signatures of the meeting secretary and members at the meeting
- Appendix with financial statements and other reports
A corporation’s bylaws may describe how its board of directors should conduct their meetings and any rules for preparing and executing minutes.
Examples of Details That Might be Recorded in Board Meeting Minutes
- Organization’s name
- The meeting place and date
- The time the meeting was called to order
- The type of board meeting (e.g., regular, called for a specific purpose, emergency)
- Attendees (including board members and any guests)
- Names of absent board members
- Who ran the meeting
- Who recorded the minutes (usually, an elected corporate secretary performs this task)
- Approval of previous meeting minutes
- Motions presented, along with who made them and the voting or consent outcomes
- Action items or follow-up required
- Next meeting date and time
- Time the meeting adjourned
- Signature of the board secretary and president
Writing and Approving Meeting Minutes
A corporation’s secretary (one of the company’s elected officers) typically records notes during the annual shareholder and board of directors meetings and then prepares minutes using those details. However, if someone else may be appointed to handle meeting minutes if the bylaws allow it. At an LLC’s annual meeting, one of the members or a manager will typically serve as the company secretary and handle meeting minutes.
A corporation’s or LLC’s annual meeting minutes must be approved per the rules in the company’s bylaws or LLC operating agreement. Here are examples of how the approval process might work:
Corporation Annual Meeting Minutes
- The corporate secretary will draft meeting minutes.
- The corporation’s officers review the draft, requests revisions (if needed), and sign the minutes.
- The minutes get entered into the corporation’s minutes book.
- At the next annual meeting, the attendees review the minutes and vote to approve them officially.
LLC Annual Meeting Minutes
- The person appointed as secretary drafts the meeting minutes.
- The secretary distributes minutes to the LLC’s members for review and feedback.
- The secretary makes requested corrections, re-distributes the updated minutes, and enters them into the LLC’s minutes book.
- At the next annual meeting, the attendees vote to approve them officially.
Board of Directors Meeting Minutes
A corporation’s board of directors meeting minutes should be approved per the company’s bylaws’ rules. Here are examples of how the approval process might work:
- The corporate secretary drafts the minutes.
- The secretary distributes minutes to the board members for review and feedback.
- The secretary makes requested corrections, re-distributes the updated minutes, and enters them into the corporate minutes book.
- At the next annual meeting, the board president motions to approve the minutes. And the board members give verbal consent to approve the minutes (as is or with corrections).
Where to Keep Meeting Minutes
Generally, statutory laws do not require businesses to file their annual meeting minutes or board of directors meeting minutes with the state. Companies should keep the original executed copy of minutes in a safe place (ideally, physically and electronically). It’s helpful to retain them wherever other corporate records e.g., articles of incorporation (or articles of organization), bylaws (or LLC operating agreement), resolutions, contracts, etc. If the state’s laws and the company’s governance documents specify where minutes must be stored, the company should follow those instructions. Ideally, minutes will be kept as a part of the business’s permanent record.
Consequences of Failing to Record Minutes
If a business entity fails to hold its required annual meetings or board of directors meetings, it has defaulted on one of its business compliance obligations. As such, a court of law could determine that it has “pierced the corporate veil,” thus jeopardizing members’, shareholders’, officers’, and directors’ personal liability protection from any debts or legal claims against the business. This could have a tremendously negative financial impact on major stakeholders.
Simplify Meeting Minutes Preparation
CorXec’s business document specialists can save you a lot of time and effort next year and beyond.
- We can manage the preparation of your corporation’s annual shareholder meeting minutes and board of directors meeting minutes in the coming year so that you don’t fall behind on your state’s and bylaws’ obligations.
- If you have an LLC with an operating agreement that requires you to hold annual meetings and draft meeting minutes, we are here to help you, too.
- And, if you’ve fallen behind on your responsibilities, we can assist with drafting minutes for prior years, too.
Learn more about CorXec’s annual meeting minutes service offering ->
Don’t delay! Contact us to learn more. Get peace of mind and get back to business by knowing your annual meeting minutes requirements will be handled accurately and on time!
