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Let us keep all your Corporate Records

 up to date for as little as $266 per year.

Are your records up to date?

The following are some good reasons why they should be:

You must be able to prove that you, as a natural person, and the corporation or LLC as an artificial person are not one and the same! By holding regular meetings and keeping accurate records (minutes, resolutions and other documents) you will be able to support your corporate actions and preserve your corporate integrity.

The IRS can inspect your corporate minute book, and without written documents to support corporate actions, your tax benefits may be disallowed. This may result in a tax liability, only because your record book was not in order.

In many states require a corporation to keep certain information and make it available for inspection. Failing to comply could result in monetary penalties, besides if the corporate veil is pierced, the shareholders of the corporation, or the members of an LLC can be held personally liable for debts of the corporation.

The corporate veil may be pierced when all of the following are true:

If the owners fail to maintain a separation between their business and their personal financial affairs, a court could find that the corporation or LLC is really just a sham and that the owners are personally operating the business as if the corporation or LLC didn't exist.

So, if the owner pays personal bills from the business checking account or ignores the legal formalities that a corporation or LLC must follow such as recording the minutes of a meeting, a court could decide that the owner isn't entitled to the limited liability that the corporate structure would ordinarily provide.

If the owner(s) recklessly borrowed and lost money, made business deals knowing the business couldn't pay the invoices, or otherwise acted recklessly or dishonestly, a court could find financial fraud was perpetrated and that the limited liability protection shouldn't apply.

If someone who did business with the company is left with unpaid bills or an unpaid court judgment and the above factors are present, a court will try to correct this unfairness by piercing the veil.

Bylaws are the most important legal document of any organization, whether it is a corporation, association, or partnership. Bylaws outline in writing the day-to-day rules for your organization and provide comprehensive guidelines to keep things running smoothly. If anyone wanted to see how you are organized or the exact duties your organization expects from its Board of Directors, the best bet would be to look at a copy of your bylaws.

Most states require annual shareholder meetings to elect the board of directors, and some corporations also require regular meetings of the board. What exactly needs to be covered by corporate minutes? Issuing stock to shareholders is one. Another is purchasing property or approving a long-term lease. You might be adopting a new pension plan or stock option program. Then you have employee salaries, corporate mergers, electing corporate officers and other official business. Detailed corporate minutes keep a tally of what’s talked about, voted upon and ultimately decided by everyone. And the paperwork itself protects the legal status of your corporation in case any legal issues come around the bend.

Taxation is another reason to be as detailed as you can with your corporate minutes. If you or other company stakeholders charge travel and other expenses to the company, your records can keep everything on the up and up in case the IRS has any questions. And of course if your corporation status is on shaky ground because you lack corporate minutes, your tax status might not have the same benefits as you enjoyed before.

Corporate minutes are also beneficial for the business itself. If any disputes arise between directors, shareholders or officers of the company, you can always go back to the corporate minutes and be able to explain why a particular decision was made.

 

 

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