Corporate Formalities for LLCs: Protect Your Business with Proper Records
Corporate formalities are like a paper trail for your business decisions. They include annual reports, minutes of meetings, records of votes, and...
3 min read
What are the minutes of an LLC meeting? They are effectively a summary of the important meetings you have in your LLC. At the initial meeting after you've created your LLC, the members will do basic tasks like adopting the operating agreement, and appointing managers and officers, among other things.
They also help memorialize important decisions you make. And you might be asking - do I always need to draft minutes for my LLC?
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Legally, probably not. But there’s a lot of advantages to following formalities like taking minutes. It helps “strengthen the corporate veil.”
How? It gives the impression that you’re a more serious company and not just a sham.
It’s also nice so you can prove something that purportedly happened at the meeting actually occurred--e.g. if you and other members agreed to pursue a deal with someone and the deal didn’t work out, the other members couldn’t come back and say you screwed them over by pursuing that deal.
How to Keep LLC Minutes
Keeping LLC minutes is effectively just "taking notes" during the meeting. Follow these steps.
- Write down your LLC’s name, the date, and address where the meeting was held.
- Write down the names of the members and indicate who was present and who was absent at the meeting. And if there’s other people who aren’t members but are present at the meeting, write their names down as well.
- If you sent a notice of the meeting prior to the meeting, attach it to the minutes. Otherwise, attach a waiver of notice signed by all the members of the LLC.
- Write down the names of the documents that were approved by the members. Usually, these documents are the Articles of Organization and the Operating Agreement.
- Write down the records of the amount deposited by each member toward their capital contribution. If the amount is paid in the form of services, indicate that.
- Write down all other decisions made at the meeting.
- Have the minutes signed by all the members who were present at the meeting and place it in the LLC records.
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It is crucial to understand the importance of keeping detailed minutes for your LLC meetings. While it may not be a legal requirement, taking the time to document key decisions and discussions can have significant benefits for your company. Not only does it help to strengthen the corporate veil and show that your business is legitimate, but it also serves as a valuable record of agreements made among members.
By following the simple steps, you can ensure that your LLC minutes are accurate and thorough. Remember, while you may not need to include these minutes in your operating agreement, they can still play a vital role in documenting the decisions and actions taken by your LLC.
So, whether you're a single-owner business or have multiple owners, taking the time to draft and maintain minutes can help protect your business and provide clarity in the future.
Do I need to include the LLC minutes in my operating agreement?
Nope! Those are two separate things. Your operating agreement--if you have one (you should)--will have all the information about how your LLC should be run. But, you could use the minutes to indicate that you adopted your operating agreement or that you amended it.
Do I need a lawyer to start an LLC?
The biggest question now is, "Do you need a lawyer to start an LLC?” For most businesses and in most cases, you don't need a lawyer to start your business. Instead, many business owners rely on Legal GPS Pro to help with legal issues.
Legal GPS Pro is your All-In-One Legal Toolkit for Businesses. Developed by top startup attorneys, Pro gives you access to 100+ expertly crafted templates including operating agreements, NDAs, and service agreements, and an interactive platform. All designed to protect your company and set it up for lasting success.
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Protect your business with our complete legal subscription service, designed by top startup attorneys.
- ✅ Complete Legal Toolkit
- ✅ 100+ Editable Contracts
- ✅ Affordable Legal Guidance
- ✅ Custom Legal Status Report
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