We believe that the regular observance of the corporate formalities of directors' and shareholders’ meetings is an important aspect of maintaining the protections the corporate form offers. If a corporation is found not to observe proper corporate formalities, its shareholders may be subject to liability and a significant advantage of maintaining the corporation is lost.
Most corporate by-laws call for annual meetings which should be documented in the form of annual minutes.
Matters appropriate for director action include the following:
- Approval of significantcontracts and leases
- Amendment of Articles of Incorporation and Bylaws
- Appointing Board committees
- Electing officers
- Reviewing financial arrangements, including review of investments, opening and closing of corporate accounts
- Designating and changing corporate officers authorized as signatories
- Policy decisions with respect to the expenditure of funds and the making of grants and ratification of those grants made
- Employing and monitoring activities of executive director
- Adopting budgets
- Appointing auditors
- Complying with governmental reporting requirements
- Bringing or defending legal actions
- Approving indemnification of corporate directors, officers and other agents; and
- Other matters not delegated to an officer of the Corporation.
Shareholders will take action which may include the annual election of directors.
Having written minutes and/or corporate resolutions prepared and filed in your corporation’s minute book is a key aspect of complying with corporate formalities.
Additionally, we often find that in reviewing your corporate minutes, we may find other legal issues that may require addressing.
We can also assist you with filing appropriate documents with the Secretary of State as required. BEWARE OF COMPANIES THAT APPEAR TO BE OFFICIAL GOVERNMENTAL REQUESTS FOR FEES AND DOCUMENTATION. Private companies often send out misleading solicitations that appear to be from the California Secretary of State. The Secretary of State has issued a warning about these companies.