by Deborah Sweeney, CEO of MyCorporation.com | Featured Contributor
A few months ago I wrote an article for SheOwnsIt on keeping your business in compliance, which had some broad advice on how to ensure your business stays in good standing with the state. At the end I briefly touched on respecting corporate formalities, but I didn’t include very much detail as to what can be done to make sure your corporation doesn’t fall out of compliance. Having a corporate maintenance plan is more of a recommendation than a requirement, but if adopted and stuck to it can save you loads of stress and even some money. When planning out your corporate calendar, be sure to include the following three items.
Corporations are required to have, at the very least, one shareholder meeting every year, during which different agenda items are voted on and the shareholders have a chance to catch up on the latest news with the business. These meetings don’t have to be boring get-togethers in a stuffy airport Hilton conference room – shareholder meetings can be held over casual appetizers and drinks, if you’d like them to be. Just keep in mind that corporate directors have to inform shareholders of the date, time, and place of the meeting, and minutes have to be taken. Plan these meetings as far in advance as you can, and then send a reminder as the date closes in. It’s also not a bad idea to start planning from the start either. At the beginning of the year, find a good time to schedule the shareholder’s annual meeting so it doesn’t sneak up on you later on and you don’t have to rush to throw something together.
Another important part of your corporate plan will be setting out how you will maintain internal records. Along with keeping the minutes for the shareholder’s meeting, you will need to keep minutes for any meeting in which the directors or executives make decisions for the business. However, minutes should remain light – there is no reason to write every single detail down. Create a template that has spaces to detail when and where the meeting was, how many people attended, the agenda items, and a breakdown of the votes. You can amend the minutes before making them official, but remember that what you put down has to be an accurate record of what happened – otherwise you could find yourself in hot water.
Reports and Renewals
Finally, write down all of the important dates and deadlines your business has coming up – when your annual report has to be filed by, when renewals have to be sent, when you have to pay your registered agent, etc. The easiest way to fall out of good standing is by missing one of these dates, and while your registered agent should tell you when these deadlines are approaching, you don’t want to depend on them entirely. Highlight these dates in your maintenance plan, and don’t leave them for the last minute.
Corporate maintenance requires a bit of extra work, but you can make it easier by planning everything out early in the year. The whole reason for writing a corporate maintenance agenda is to keep you from scrambling at the last minute and possibly missing an important date for your company. By adhering to corporate governance requirements by holding meetings, diligently recording minutes, and sending in the reports and fees required by the state, you’ll never have to worry about falling out of good standing, and won’t be hit with non-compliance fees. In my opinion, that peace of mind is well worth the few days it takes to set up your corporate maintenance plan.
About the Author:
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @deborahsweeney and @mycorporation.