Given the hustle and bustle of year end, some of the important company action items may have spilled over into the New Year. For instance, has your company prepared annual minutes to document company action taken over the course of the year? Corporations are required to hold annual meetings for shareholders and the board of directors. While Limited Liability Companies (LLCs) are not required to have annual meetings, I recommend that that all companies hold annual meetings and use this opportunity to document all important company action that was taken over the course of the year.
The term “minutes” simply refers to a written record of the action taken during a meeting. If you do not hold meetings and take minutes to the meeting, there is no record to show that action taken was on behalf of the company. As a result of failing to document your company meetings, the Arizona courts, IRS, and creditors can determine that you have ignored your company’s separate existence and you have been acting as an individual, rather than acting through the company. If this happens, the corporate protection may be “pierced” and you may be held personally responsible for the company’s actions and debts. Unfortunately, in these challenging times, we are seeing more and more lawsuits and third parties are making every attempt to pierce the company veil and reach the owner’s personal assets for company obligations.
Here is a list of action items that the company should document in its minutes: Minutes Check List
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