If a business is large enough, it can incorporate itself and gain certain benefits. For example, by being a corporation, rather than a business, it can avoid liability and transfer an ownership interest more easily. However, you cannot simply call a business a corporation and get all the benefits. There are requirements that must be met, or else you will be audited and face serious consequences. One of the requirements is that corporate meetings are held often enough and minutes recorded each time. So how often do you need to hold a corporate meeting and record the minutes?
For large corporations, this is hardly ever a concern. In order for the corporation to even function, it will have to hold meeting more often than the requirement. If the corporation is smaller, however, an effort may be necessary to be sure this requirement is consistently met.
First of all, there are a few meetings that must strictly take place:
- An initial meeting – When the corporation is first formed, a meeting must be held to elect corporate officers and establish the corporation bylaws.
- An annual meeting – At least once per year, the board of directors must meet and discuss corporate issues.
That may not sound like much, and it isn’t, but that is only the absolute minimum number of meetings. These are the meetings that must happen at particular times and after certain events. If you have no more meetings than these, it still may not look like your corporation is really a corporation in more than name only.
You should be sure to have occasional meeting more often than just once per year. The exact amount is not written in stone anywhere, so you should not worry about meeting some arbitrary number of meetings each month. This is not about tricking the system. Instead, act like a corporation. Have regular meetings to keep things running smoothly, rather than because you have to.
You need the secretary to record minutes of everything that happens at the meeting, including what is discussed and what decisions were made. Meetings may be relevant when an employee is hired or terminate, when major purchases take place, or when issues are causing problems. The minutes should reflect all of that, as a business lawyer in Charolettsville, VA can attest. It is possible for one person to be the sole person on the board of directors. If this is the case, you still need to hold meetings and record minutes of your decisions.
Thanks to Dale Jensen, PLC for their insight into business law.