Entrepreneurs have a lot of responsibilities after they form a corporation. They need to register for trademarks and obtain an employer identification number (EIN). It’s also important to file for appropriate business licenses. Additionally, small business owners must maintain corporate minutes and bylaws.
Corporate minutes and bylaws are required for all corporations. Here’s how these documents play a key role in decision making. Moreover, here’s why you must update minutes and bylaws before the year ends.
What are corporate minutes?
Minutes are notes taken during meetings. A specific individual, like a personal assistant or secretary, is appointed by the corporation to take minutes. Further, anyone tasked with taking minutes must follow three rules. Minutes must be legible, in chronological order, and able to cover important information. This information may range from budget discussion to performance feedback. Even a detail as simple as the meeting’s date must be recorded in corporate minutes. As time progresses, these minutes may be looked at and referred to by members of the corporation.
How minutes work
Corporations are a slightly more formal business entity than, say, forming an LLC. Above all, it’s important to record minutes for the following reasons.
- A written record for reference. Many individuals may think it’s unnecessary to take minutes during a meeting. Isn’t it going to be easy enough to remember everything afterwards? Unfortunately, this is rarely the case. But, important information is often forgotten once the meeting has ended. However, keeping a written record of minutes allows attendees to easily recall details that might have otherwise been forgotten.
- Stay on track. What if you are unable to attend a meeting? Taking minutes provides everyone in the corporation with a clear reference point. Recording minutes allows attendees to understand the meeting’s details. Therefore, they may be better able to stay on track with existing assignments. Minutes also provide an understanding of upcoming initiatives, too. As such, team members have a better idea of the projects to focus on completing because of recorded minutes.
- Increases productivity with team members. How do minutes make us more productive and better at communicating? Firstly, clear minutes act as a tool to avoiding arguments. Certainly, there’s no need to bicker about decisions because minutes provide a visible record. As such, team members with clearly outlined minutes are less likely to get into disagreements and more likely to stay focused on their workloads since they fully understand what happened during the last meeting.
What are bylaws?
If you have incorporated as a corporation, you must draft bylaws. These are the rules and regulations of your corporation. Inside corporate bylaws are additional details for how to conduct meetings and shareholder voting formalities. More information may also be provided about the functions of each corporate office. Preparing and updating bylaws on a regular basis helps protect the corporation.
How bylaws work
Corporate bylaws differ a bit from minutes. Bylaws are not recorded meeting notes. They are a detailed set of rules. These documents specify the internal management structure of a corporation.
Who creates bylaws? Generally, this is drafted by the corporation’s founder or board of directors. After, the corporation’s directors agree upon and adopt bylaws for the organization.
Bylaws, for instance, cover these key details:
- Rules for electing directors to the board
- Organizing meetings
- The rights and responsibilities of owners
- Conducting annual meetings
- Instructions for adding or removing directors
Corporations do more than establish rules when they draft bylaws for their organization. Ultimately, bylaws allow businesses to remain consistent in their day-to-day operations. Should any questions arise, individuals may refer back to their bylaws for guidance.
Time to update minutes and bylaws!
The year is quickly coming to a close! Your corporate minutes and bylaws must be updated before the end of the year. Otherwise, your business could face the following penalties.
- Falling out of compliance. If you don’t update corporate minutes and bylaws, your business will fall into bad standing with the state.
- Penalty fees. For example, you may be pay hefty penalty fees if you are not compliant.
- Disorganization and confusion. Taking minutes keeps businesses on track to success. Bylaws prevent internal conflict. But, your business may suffer as a result if you do not update these documents.
- Dissolution. In the worst cases of bad standing, the state may dissolve your business.
Stay compliant with MyCorporation
MyCorporation wants to keep your business in good standing. For only $99, we will prepare and update these documents when you order our Minutes and Bylaws Service.
Further, here’s what you’ll receive from us:
- Customized corporate minutes
- Corporate bylaws
- Waiver of notice of first meeting of board of directors
- Notice and minutes of regular meeting of board of directors
- Waiver of notice of first meeting of shareholders
- Notice and minutes of annual meeting of shareholders
- Stock transfer ledger
MyCorporation’s staff attorneys will draft professional documentation in print and digital versions. Further, you may edit as needed! This allows you to fulfill corporate formalities and stay in compliance.
Time is running out! Order now, and have the peace of mind that your business meets required state compliance laws!