The corporate minute book is a necessary evil of being an owner of a corporation. It may seem to be a waste of time but it could be a vital piece of evidence given any number of events in the business world.
The documentation of corporate procedures, policy decisions, asset acquisitions, hiring’s and firing’s, tax decisions and any number of other corporate activities could prove invaluable with future events.
Here is a list of items, events or situations that would warrant in entry in the ole “corporate minute book”:
- When a new officer or shareholder of the corporation is selected.
- When an officer or shareholder retires, passes-away or sells their stock.
- When any changes or modifications in officer or employee compensation plans are made.
- When any bonuses are announced, accrued or otherwise paid.
- Justification for any of the changes in salary, bonuses or compensation.
- Documentation of any retirement plan adoptions, changes or modifications.
- When fringe benefit plans are adopted or cancelled.
- When any new stock or stock plan is issued, adopted or otherwise modified.
- When the corporation makes or approves any substantial purchase of assets or property.
- The approval or recommendation of any loans to officers and/or employees.
- The discussion of any plans to sell, liquidate or reorganize the company.
- Justification for the accumulation of earnings vs. the issuance of dividends.
Then there are the basic entries that would typically precede the major decisions of a meeting:
- The taking of attendance.
- Followed by a determination of quorum or its’ waiver.
- Acceptance of the prior meetings’ minutes.
- A review of the financial condition or recent business results.
- Ratification of any significant event, action or policy from the prior meeting.
The taking and keeping of detailed and organized minutes can become useful in the event that any later events come into question by creditors’, the IRS, any attorney should a lawsuit arise, employees and even officers and shareholders’ who either attended or missed the company meeting(s).
The minute book should be organized in chronological order. It should be easy to read and follow. Keep it simple and it will be easier to maintain and not a “burden” which will promote noncompliance.
This list is by no means an all-inclusive list and more or less can be listed in any company’s minute book.