Corporate Meeting Minutes - Part 3 Corporate Minute Books
This article on corporate minute books is presented for general informational purposes. The material contained herein should not be construed to be legal or tax advice. You should always consult with a licensed legal or tax advisor before you take any action that has legal or tax consequences.
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Corporate minute books will usually contain a written record of all actions authorized at corporate meetings. Corporate resolutions are also usually kept in the minute books. Most small business companies will purchase a customized corporate records book to organize their corporate governing instruments, such as:
Articles of incorporation;
Corporate charter;
Bylaws;
Notices;Minutes;
Resolutions;
Share certificates;
Shareholder registry and stock transfer ledger; and
Tax status election documentation.
Bylaws
Bylaws, usually included in corporate minute books, are the written instrument in the corporate minute books that contain the rules and internal statutes that govern the operation of the corporation. They will normally set the terms of office, powers and duties of the shareholders, directors and officers. They are adopted at the organizational meeting of the corporation and may be amended from time-to-time in accordance with state corporate statutes, the articles of incorporation and the bylaws. If a resolution is adopted that conflicts with the bylaws, the bylaws will prevail. Likewise, if the bylaws conflict with the articles of incorporation, the articles rule. And, of course, state (and federal if applicable) statutes trump all others.
Resolutions
Resolutions are used to clearly define corporate actions, delegated authority, and conduct essential corporate business. A resolution is usually limited to a single issue. Its language and adoption may bind the corporation and the directors who can be held personally liable for failing to follow the mandate of the resolution. Resolutions may also be use to alter, amend or revoke a previous resolution. They further clarify the action they address and can greatly reduce future conflicts or misunderstandings between directors and shareholders. Resolutions are an essential part of how to write meeting minutes and are usually kept in corporate minute books.
Conducting Corporate Meetings
The corporate bylaws, or company operating agreement, (located in the corporate minute book) generally dictates the conduct of meetings: who will preside at the meeting and who will keep and record the minutes. The chairman of the board of directors may preside over meetings of the board. The President may preside over meetings of the shareholders. The secretary will normally keep notes of all meetings for the corporate minute books. Those notes should generally include, among other things as appropriate, the following:
Name of the company;
Meeting type (regular, special or annual);
Meeting style (directors or shareholders);
That a quorum was present throughout the meeting (check your state statutes, articles and bylaws for your quorum requirements);
Meeting place;
Meeting date;
Meeting time;
Meeting participation (in person, by telephone, by video chat, etc. (Note: some state corporate statutes require the attendees of a corporate meeting to be able to "hear" each other, e.g. Nevada Revised Statutes §78.320(4).);
Purpose of the meeting;
That notice, or a waiver of notice, was duly given;
Presiding officer's name;
Secretary's (or other officer's) name who kept the corporate meeting minutes.
In the case of a shareholders' meeting, denoting each shareholder's name and their number of shares held is a further indication the meeting was "legal" and that a quorum of shares were represented and voted at the meeting.
Notice and Waiver of Notice
Notice or waiver of notice of a meeting should normally state the date, place, time and participation for the meeting. It should also include a statement as to the purpose of the meeting and note that the meeting was called or noticed by the proper corporate authority. Requirements for the notice will be found in state statutes, the articles of incorporation and the bylaws or other operating agreement. The requirements for notices should be strictly followed.
Small business companies many times use the waiver of notice form for meetings. The waiver of notice may be signed by the directors or shareholders at the time of their meeting if permitted in the governing documents. All notices should be attached to their accompanying minutes and housed in corporate minute books.
Drafting the Corporate Meeting Minutes
After the meeting, the corporate secretary should draft the minutes for the corporate minute books. The draft may be submitted to the members of the board, shareholders and corporate counsel for their review comment and correction. Once all is in good order and acceptable to the parties involved, a final draft of the corporate meeting minutes can be prepared for the corporate minute book.
At the next meeting, the corporate secretary should present the final draft of the minutes of the previous meeting for acceptance and approval. Once approved, the secretary will place the finalized minutes in the corporate minute book together with any other supporting document, contracts or related documentation.
Minutes of a previous meeting are read and submitted for final approval at the next meeting to afford an opportunity to correct any errors or omissions in the minutes before they are entered on the corporate minute book. Sometimes the secretary's syntax or understanding of a concept or principal may differ from a motion maker's original intent. When the minutes of a previous meeting are read, this distinction may become apparent and a disagreement may arise as to the true meaning of words and phrases used. In such cases, the matter may need to be referred to a vote to settle how the minutes should read and finalized for corporate minute book. The correction may be made on the spot and resubmitted for approval. Or, it may require more time to correct and be resubmitted to a future meeting for approval.
Preserving the Minutes
A good practice is to keep the original corporate minute books containing the original signatures in one safe place, and an exact or conforming copy of the same in a separate location. The copies may be certified by the corporate secretary to be true and correct, and attested to by the president or chairman of the board, or all three.
Additionally, the documents may be stored in electronic form on a computer disk or hard drive. Documents with signatures can be scanned into digital files in various file formats. You may also be able to create electronic documents, attach electronic signatures to them, and store everything on your computer without any paper at all. In that case, the records could be copied and backed up regularly for safe keeping. And, should you ever need to reduce a document to paper for some purpose, you could print the file and produce it as necessary. Depending upon your file format, you may be able to index the files, do word searches, and more.
For easy reference, and to protect the corporate privacy, a system for cataloging resolutions may be implemented. That way, should you need to locate and present documentation of a specific resolution you could do it in isolation so a third-party would not be able to view other unrelated documentation and private corporate records.
Go back to reading Part 1. Go back to reading Part 2.
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