annual meeting

Business Basics: Annual Meeting for Small Corporations

Corporate meetings aren’t exactly fun; they’re tied to board rooms, suits, and a lot of financial talk. And so smaller corporations – especially those with just a handful of shareholders – often ask whether they really have to hold a meeting every, single year to effectively rubber-stamp the same board of directors and file their annual report. The answer, of course, is yes. Annual shareholder meetings are legally required for private and public corporations, regardless of size. But your annual meeting doesn’t have to be a stodgy affair. In fact, one of the best parts about being a smaller corporation is the extra little bit of freedom you have in how these meetings are run.

Forget the Board Rooms and Offices

You have to set the date of your annual shareholder meeting in your bylaws, but the location is up to you. Plenty of corporations opt for the traditional, formal meeting – everyone gathers in the office, there’s a podium, people wear suits, and everything is very cut and dry. But what if you run your business from home, as nearly half of all small business owners do? Or what if you want your annual meeting to be a bit more enjoyable? There’s absolutely nothing wrong with meeting at a restaurant, or around your kitchen table. In fact, we’ve talked to plenty of CEOs who make their annual meeting a potluck; the few shareholders they have all bring a dish, they sit down, do their formal meeting, and then spend the rest of the day eating and talking. Some states actually do set a minimum for the number of shareholders that must be present, so hosting a more laid-back meeting can help ensure people do come.

Have the agenda laid out and ready to go

The chair can technically “wing” the meeting if they have a good idea as to what needs to be voted on. Normally these meetings are to appoint and/or remove directors, modify corporate bylaws, vote on shareholder initiatives, and approve transactions requiring shareholder approval like mergers or asset sales. But it’s a better idea to list out what, exactly, needs to be brought up so you can keep the formal part of the meeting as quick and easy as possible. Different states may also require different numbers of votes depending on the transaction – sometimes a simple majority is not enough – so planning this out lets you know what numbers you actually need.

Keep your minutes light

You must keep the minutes of your annual meeting, but you do not have to transcribe every, single thing said. Note the date, time, and place of the meeting, take attendance, lay out the agenda, and record votes. If anything new is brought up during the meeting, make sure to note that as well. Otherwise, your minutes can effectively be a quick sketch of your annual meeting. Just make sure, before everyone leaves, you pass around the minutes so everyone can review them. These constitute an official document and it’s important they portray the meeting accurately.

Every corporation must host an annual meeting for its shareholders, but there’s no reason why it has to be this dreaded, boring affair. Corporations, especially those with just a handful of shareholders, have a bit of leeway as to what the meeting will actually look like. Set out the agenda, keep minutes, and vote, but feel free to make this a meeting of friends, as well as a meeting for the shareholders.

Have any questions about corporate governance? Want to form your own corporation but not sure where to start? Click here for a free consultation, or give us a call at 1-877-692-6772 and we will be happy to answer any questions you may have!

 

SHARE:

Experts Weigh In: Forming LLCs vs. Corporations

llcs vs corporationsOne of the first decisions every business owner needs to make is what entity to file their business as, and that choice is typically between LLCs vs. Corporations. Really the decision comes down to what fits the needs of the business owner and the business, but there is still discussion on which entity is best. Here at MyCorp, we gathered together a panel of professionals to get their expert advice on LLCs vs. Corporations and which is the best to form for your business. Which side are you on?

1. “Generally speaking, corporate status is preferable. Banks typically don’t view LLCs as favorably during the loan application process and corporations don’t pay taxes on fringe benefits. These include group-term life insurance, medical reimbursement plans, medical insurance premiums, and more.”

– John Boyd, Principal, The Boyd Company, Inc.

(more…)

SHARE:

Keeping Your Corporate Machine Running Smoothly

There are several parts to maintaining a corporation throughout the year in order to remain in compliance with the state.  Maintaining proper corporate documents is essential to running a successful corporation. Without it, the corporate veil may be pierced and the shareholders may be personally liable.  The corporate veil is the barrier that separates the corporate entity from the people who own the corporation.  This is what allows the corporation to be its own legal entity capable of buying property, suing, and being sued.  If this veil is pierced, then the separation between the corporate entity and the owners is destroyed and the individual owners of a corporation can be held responsible for all of the corporate liabilities.  The last thing any corporate shareholder wants is to be personally responsible for the liabilities, losses, and debts of a corporation. (more…)

SHARE: