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Running a company is hard work. Most of the owners’ available time and attention go to day-to-day operations, strategic planning, workforce management, and numerous other concerns. As a result, corporate recordkeeping is not high on the list of operational priorities but nevertheless should not be ignored.

Why Keep Corporate Minutes?

A corporation’s recordkeeping maintains the backbone of the corporate form, which in turn, affords the corporation’s hallmark liability protection to owners, management and employees alike. Corporate minutes provide a necessary record of corporate action by evidencing how directors and shareholders arrived at particular decisions (i.e., were these decisions arrived at fairly and after full disclosure?) and who voted any particular way. They are considered legal documents by auditors, the IRS and the courts and can be useful in numerous contexts, including company disputes.

Corporate minutes can serve as a measuring stick for company progress, because their chronological record of management decisions presents a historical timeline and also forms the building blocks for future corporate action. In the context of a company sale, organized and updated minutes allow potential purchasers a clearer view into the company’s operational history.

How to Keep Corporate Minutes

Minutes are relatively easy to prepare and normally may be drafted in-house. Any deliberation and decision on an action requiring approval by the board of directors or shareholders – including key legal, tax and financial matters – should be captured in formal corporate minutes. This paper trail should reflect decisions on issuing stock to new or existing shareholders, pledging of corporate assets, purchasing real property, authorizing significant corporate debt, and the adoption of stock option or retirement plans. Day-to-day business happenings like ordering supplies, launching new services or products or hiring or firing of low or mid-level employees do not typically require director or shareholder approval with accompanying corporate paperwork.

Depending upon the nature of the meeting or deliberation, minutes may be long and detailed or short and to the point. As long as they reflect the true-to-life considerations and decisions of those parties in attendance, corporate minutes will serve as a simultaneous picture of the company in its real-time state and also its historical context. Practicing consistent  corporate recordkeeping serves as an important foundational basis for a sound corporate house.

If you have questions regarding corporate recordkeeping or you would like to start a business, contact our business attorneys, Letty Laskowski at llaskowski@mccmlaw.com or 585-512-3538, Amy Varel at avarel@mccmlaw.com or 585-512- 3506 or Michael F. McConville at mmcconville@mccmlaw.com or 585-512-3520.

This publication is intended as an information source for clients, prospective clients, and colleagues and constitutes attorney advertising. The content should not be considered legal advice and readers should not act upon information in this publication without individualized professional counsel.

About MCCM

McConville Considine Cooman & Morin, P.C. is a full-service law firm based in Rochester, New York, providing high-quality legal services to businesses and individuals since 1979.  With over a dozen attorneys and a full paralegal support staff, the firm is well-positioned to right-size services tailored to each client. We are large enough to provide expertise in a broad range of practice areas, yet small enough to devote prompt, personal attention to our clients.

We represent a diverse range of clients located throughout New York State and New England.  They include individuals, numerous manufacturing and service industry businesses, local governments, and health care professionals, provider groups, facilities and associations. We also serve as local counsel to out-of-state clients and their attorneys who have litigation pending in Western New York courts.  For more information, please contact us at 585.546.2500.