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Updating the corporate minutes

At each Board meeting, one individual will be designated secretary of the meeting who will be responsible for preparing written notes (a.k.a.“minutes”) memorializing the discussions by the Board and setting forth any formal resolutions adopted at the meeting.Have on hand the forms used to document votes and resolutions. Use the meeting agenda to guide the flow of the minutes.All corporations are formed under state law and are considered C corporations when first formed.It is extremely important to keep excellent paper records.Over the life of your company, you will be asked on any number of occasions to provide evidence of Board approval of certain actions, whether in connection with the opening of an additional credit line, a seed round financing or on the eve of your initial Public Offeringdue diligence requests from potential investors’ counsel or perhaps a company interested in acquiring your assets.Having up-to-date, clear and concise records of all Board actions will make those processes less painful.

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Whether you have organized your corporation in Delaware, California or any other state, your existence as a corporate entity begins with the filing of your organizational “Certificate of Incorporation Certificate of Incorporation” or “Articles of Incorporation” (states differ on what they call this document; Delaware uses “Certificate of Incorporation”).The preparation of corporate minutes includes the actual taking of minutes at a meeting and producing an official record of the minutes. Place near the minute-taker the materials and equipment needed to take minutes.Use pen and paper or a computer to record the minutes.Minutes document governance of the business, such as required board meetings.Failure to document the corporation’s critical decisions can affect corporation status, personal liability protections, tax benefits and the outcome of court cases.Minutes help fulfill the obligation to inform shareholders and others of corporate activities and decisions.Most corporations designate the board secretary, an officer of the corporation, to perform or supervise the recording, authentication and distribution of minutes.For such corporations, the failure to prepare corporate minutes can have devastating consequences.Without properly drafted corporate minutes, the separate legal entity status of your corporation can be discredited.After this initial document is filed, the company can only act through its Board of Directors Bylaws.For more details, see our article What Decisions Need Approval from Your Board of Directors?

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