One day your LEGAL COUNSEL is going to ask you for a copy of your Corporate Minutes Book when you don't expect it. If you have forgotten to keep it current, letting it collect dust on the bottom shelf, then don't be surprised if you suddenly find yourself in deep trouble. EVERY new corporation is required to have documentation about how the company is going to fulfill it's mission. All changes, i.e. annual salaries; bonuses; etc. are supposed to be recorded. Now, I know you're going to quickly reach in the TOP drawer and pull out the corporate minutes book. All executives keep this document UP TO DATE and you should, too. You're the exception rather than the "rule" in corporate America. TRUTH? Most Corporate Minutes Books sit on the bottom shelf without any annual entries about changes made or new directions in the firm... UNTIL... some legal issue arises which demands immediate review and usually lots of catching up with the details. RECOMMENDATION to YOU Keep your Corporate Minutes Book current. Your own legal counsel should be sure that you are keeping these records in good order. It's very difficult to GO BACKWARDS trying to FIX something after the fact. Do not consider this activity as a waste of your time. It can pay huge dividends in years to come when this record book is maintained properly. Let me give you a REAL-LIFE example. One day I asked my attorney what it meant to be the President of a corporation, or the CEO, or the Chairman of the Board. He said, "whatever it says in the Corporate Minutes Book" and that's the reason you are reading it here. Our CMB said nothing! If you own 51% of the corporation you can make it mean whatever you want it to mean. However, if you own 25%, 42% or 50% ownership of the company then unless you have spelled it out in the corporate minutes book it can turn on you in a surprise attack from the other owner/s. In most large firms, the "pecking order" in decision making powers are Chairman; CEO; President. In many, all 3 titles belong to the same person and allows for ease of operation control. However, the details of authority MUST BE SPELLED OUT in the Corporate Minutes Book. Never think you can just "wing-it" or "forget-it" because this is just another bureaucratic requirement of the same Government that wants to control your business. It's in your best interest to do what the law requires. MARK YOUR CALENDAR Every year, follow the plan. Pay your taxes when due and file business returns as required. Meet with your legal counsel - bring the Corporate Minutes Book current - with all salaries, bonuses, new directions, new positions, etc. recorded, dated, signed, sealed, and delivered in writing for your personal and corporate security. Lesson Learned: NEVER run your business from the "hip" as some often do. Understand the legal; accounting; insurance coverages; taxes; etc. Operate your business professionally for your future benefit and success. |
