The secretary shall preserve minutes of all meetings held by the company, including annual meetings and special conferences.
The secretary shall preserve minutes of all meetings held by the company, including annual meetings and special conferences. The minutes might be brief, but they must include the essential information:
Results of voting for each resolution
Written consents must be obtained prior to or shortly after the permitted acts.
If the company fails to retain updated minutes, the IRS may investigate disparities between corporate resolutions approved by the board of directors (and shareholders, if applicable) and the business’s activities. Expense reimbursement may also be reclassified as dividends, and insider loans as extra capital. Since the reclassification shifts some items to “income,” both will result in increased taxes and penalties.
As part of the discovery process in a case, the plaintiff’s lawyers might request corporate meeting minutes. If the minutes are not kept up to date, it might be assumed that the officers and shareholders acted without the approval of a corporate resolution. It may also “tear the corporate veil,” providing the winner of a case access to the officials’ and shareholders’ personal assets.
