By Claudia Pollak, Esq., Updated October 19, 2020
Regardless of the size of the business, companies must observe all of the required corporate formalities. Meeting minutes document the decisions made by the company’s governing board and help to preserve the “corporate veil” in the event of a lawsuit. If corporate formalities are not observed, the business’s owners’ personal assets may be at risk.
One such formality is the maintenance of a corporate record book containing minutes of meetings conducted in accordance with the company’s governing documents, such as the bylaws or operating agreement. Every major decision that affects the business should be approved and ratified by a resolution of the governing board contained in the corporate records. Even in a one-person company, resolutions should be drafted, signed, and maintained with the corporate records.
There is no specific required format for meeting minutes, but the document should include any important decisions made regarding the company, its policies, and operations. Minutes should include, at a minimum:
- Date, time, and location of the meeting
- Names of all officers, directors, and others in attendance
- Brief description of issues discussed and actions taken
- Record of votes taken, including whether the vote was unanimous and whether anyone abstained from voting
- Vote and approval of the prior meeting’s minutes
How do you know whether a decision should be documented in the meeting minutes? Generally, if a transaction is within the scope of the company’s ordinary course of business, it need not be addressed in the minutes. On the other hand, major decisions should be documented in the minutes, such as:
- Significant contracts
- Reorganizations and mergers
- Employee benefit plans
- Elections of directors or officers