Video Summary

How do I write corporate minutes? Well first let’s talk about what we mean by corporate minutes. Each year, at least once a year, you need to have a shareholders meeting and under your bylaws of your corporation you have to give notice to the shareholders that you’re holding a meeting. What you customarily do is simply have a waiver signed particularly whenever let’s say one or two shareholder corporation and they simply waive notice of the meeting. The shareholders then primary function is to elect the directors and so you write up the minutes giving the date, time and place the meeting took place, who was present and how many shares of stock that each of the shareholders held and hopefully if they were present or not so that you have a quorum and you further go on down in the minutes and say that the shareholders conducted an election and elected so and so, which is usually themselves, as the directors of the corporation. And then you have the secretary sign off on the minutes and put those in the corporate record book with the waiver of the notice of the meeting.

Then the directors usually meet immediately thereafter, if it’s a small corporation, and again, if there are just one or two directors, you have them sign a waiver of the notice of the meeting. So then the directors, their primary function are to select the officers for the upcoming year and they elect who the president, vice president, secretary, treasure is concern. Also that they may approve any major purchases that the president or someone has done during the past year, possibly approve salaries; contributions to 401K’s, compensation, bonuses, and things such as this would then go in the director’s meeting for the various officers. And then again, you have the Chairman of the Board sign the minutes as well as the secretary for the corporation and then insert the waiver of the meeting and the minutes.

We, at my office, send out a questionnaire and a notice that these minutes need to be done. Each year we try to send it out the first part of the year and ask for the information and then we prepare these in duplicate; the shareholders minutes and the director’s minutes. Once we have them prepared in duplicate, we send them back out to be signed with one copy going in our file for the corporation, the other going in the corporate record book.

I believe we charge $250 for the preparation of the minutes each year. We also remind you that you must file with the Secretary of State each year and right now the fee is $150 must be paid before May 1st, 2000, well its May 1st of each year.

It is also very critical that you have shareholder meetings and director’s minutes if you want to enjoy the protection of not being liable for the corporate debts. Because if you’re going to be a corporation, you need to act like a corporation and have your annual meeting of shareholders, elect directors, the directors need to elect the officers and then whenever you are sued and they attempt to pierce the corporate veil, then you have the corporate minutes to show that these are corporate debts and the shareholders will not be personally liable for the corporation debts.

So if you have any questions about your corporate minutes, give me a call at (727) 847-2288.  Thank you.

Video Summary

What do you mean by corporate minutes? Each year, a corporation should have a shareholder’s meeting. And the purpose of the shareholder’s meeting is to elect the directors of the corporation. So, that should be one meeting. And not all shareholders are necessarily directors, although in most small corporations the shareholders do serve as directors and officers. But you need to have separate meeting minutes for the shareholders, and their purpose is to elect the directors.

The other corporate minutes are director’s minutes. In the director’s minutes, the directors will elect the officers of the corporation; that’s the function of the directors rather than the shareholders, so you have separate minutes. And so, the directors elect the officers, and also set forth any particular corporate loans, or anything out of the ordinary, particularly if there’s been shareholder’s loans, or if you’ve loaned money to shareholders or the shareholders have lent money. Then, they need to authorize the loans in the director’s minutes to the president of the corporation. So, you need to have two sets of minutes; one for shareholders, and one for directors.

If you’d like an information sheet and assistance in preparing your corporate minutes, whether they be shareholders or directors or both, and/or filing your annual report, give me a call at 727-847-2288.  Thank you.

Video Summary

When I buy a business am I buying the debts? Well that all depends on whether or not you are buying the business entity, such as the stock in a corporation or if you are buying the assets.  Most of the business sales contracts that I review are a sale of the business assets, so you are not agreeing to pay any of the debts.  You simply contract to buy the good will, which is the name of the business, the phone number, the trade name, as well as the business assets; such as the fixtures, equipment and also inventory.  Usually with the accounts receivable, if you have those in a business, stay with the seller and so it’s up to him to collect those monies. In an ordinary business transaction you do not assume the debts of the seller.

That is all specified in a contract for the sale and purchase of a business.  One of the big assets of a business is a lease, so you certainly need to be sure that you assume and the lease is assigned to you at the time of closing so you do not wind up with a business and not have the lease put into your name.  So you would be assuming that obligation.

You also may be assuming obligations if certain equipment is financed; that’s another obligation you would have.  However, as far as vendors are concerned, such as your suppliers, then you are not assuming that debt. Although it is a good idea to verify that the vendors will continue to supply you with the product or whatever it is; even if the former owner of the property failed to pay them. That would be an impact on you, but you do not have to pay the debts of the former owner when you only buy the assets.

The utilities are something else that you need to be careful of; also sales tax. You need to make sure that there is no outstanding sales tax that could be a lien against the equipment, as well as tangible property tax.

Now you do assume all the debts of the business if you simply purchase the stock in a corporation.  Then you get all the assets and all the liabilities. You need to be careful when you sign the contract to address all these issues.

So if you would like to have me represent you or prepare a contract for the sale of a business well give me a call at 727-847-2288.

Video Summary

Why do I have to file corporate minutes? Well, first of all you don’t file corporate minutes, other than your corporate record book. The reason you have to have shareholder meetings and board of directors meetings is to act like a corporation, in that you have shareholders and they meet once a year to elect the directors of the corporation and then the directors meet at least once a year and they elect the officers of the corporation and make major decisions as far as the business is concerned. So if you don’t have corporate minutes or corporate meetings or shareholder meetings and directors meetings, then you’re not acting as a corporation. You are just fooling yourself and proceeding on as far as it’s your business and you are incorporated.

 
So what I find many times is people have incorporated, however, they have not issued any stock. They don’t have a corporate book and they don not do corporate minutes. So what does this mean? Well, if you get sued and they can sue you personally, which is probably one of the biggest reasons why you have a corporation is to limit your liability for the business debts or liabilities. So if you don’t act like a corporation and have shareholder minutes and director minutes, well then you’re not acting like a corporation and therefore, could have personal liability for the debts of the corporation. You also need to be sure that the stock is issued and you have a corporate record book with the stock in it or some record of it. 

What you do file with the Secretary of State is your annual report and that costs you $150.00 or $200.00 a year and the reason you have to file that every year is because it’s a form of a tax and if you don’t, why then the Secretary of State will dissolve the corporation. And you need to be sure to file it timely because the penalty is about three times what the filing fee is. So be sure that you file by the deadline, which I believe is May 1 of each year. And you need to be sure you get your annual report filed with the Secretary of State.

So if you’d like for me to assist you in the preparation of your minutes or setting up a corporate record book, give me a call at (727) 847-2288.

Video Summary