The Importance of Keeping Meeting Minutes for Your LLC or Corporation

Forming an LLC or Corporation is a typical strategy to protect your personal assets from claims of creditors for a business.  One of of the requirements for maintaining the LLC or corporation legal  existence (and the liability protection that it affords) is that the members/shareholders and the Board of Managers/Members/Directors must meet at least annually. Although most people view meeting minutes as a necessary evil, it doesn’t have to be a waste of time. For example, in addition to being a first step in making sure the entity is respected as a separate legal entity, an annual meeting can be used as an important tool to support your company’s tax positions.

Besides the election of officers and directors, other actions that should be considered at the annual meeting include the directors approving the accrual of any bonuses and retirement plan contributions, and ratifying key actions taken by managers and officers during the year. The directors should also specifically approve any loans to shareholders to lessen the opportunity for the IRS to reclassify the loans as taxable dividends.  For LLCs taxed as partnerships, there are a number of elections that should be considered when dealing with expenses paid individually by partners.

These are just a few examples of well planning annual meeting minutes can be an important part of your business tax records. We would be happy to be involved in your company’s annual meeting and to assist in making sure tax-effective minutes of the meeting are prepared. When scheduled shortly before the corporation’s year-end, many companies consider the annual meeting as an opportune time for their accountant and attorney to plan together for the wrap up of the year. 

Written by

Steve Moss, CPA is a partner at Holden Moss CPAs and loves helping businesses and their owners grow to be the very best they can be. Our other offices include Raleigh, Oxford and Warrenton. We are a little different at Holden Moss CPAs. While we still provide traditional tax and accounting services, years ago we realized many clients wanted help in running their businesses and were hungry for ideas, solutions, strategy, and execution. In response, we expanded our skill set and joined Ran One, a global network of business consulting firms. Our membership with Ran One gives us access to proprietary resources and analytical software to help our clients grow, become more profitable and valuable, and have the lifestyle they desire. Now, blended into the fabric of our normal tax and accounting needs, we are focused on our clients’ businesses in a very different way. While our approach is not right for everyone, for those whom it is, incredible results may be obtained. Whether you have a new, or established, business, or for those in transition of selling or retiring, or for those who simply need to develop an exit strategy or succession plan, our unique approach to client service may be the edge you need.

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