According to statistics, 80% of US corporations fail to maintain their corporate minutes. For such corporations, the failure to prepare corporate minutes can have devastating consequences.
Without properly drafted corporate minutes, the separate legal entity status of your corporation can be discredited. Ultimately, without corporate minutes, the courts, the IRS, and other taxing authorities can allow plaintiffs, creditors and other entities to sue you personally for debts and actions of your corporation.
During an audit, the IRS scrutinizes corporate minutes looking for discrepancies between the actions of the corporation and the corporate minutes adopted by the Shareholders and Board of Directors.A simple discrepancy in the corporate minutes can be problematic. A complete lack of corporate minutes is even worse.
Ultimately, without corporate minutes, you can lose tax deductions and benefits and even be subject to penalties if you do not conduct meetings that adopt resolutions supporting the actions taken by the corporation. As you can see, corporate minutes are very important.
Did you know?
|Open a bank account|
|Increase your compensation|
|Sign a lease agreement|
|Simply let a year go by|
In this post-Enron world, corporate responsibility and governance is red-hot and you can’t afford to risk your personal assets by neglecting your corporate entity. Don’t jeopardize your “corporate veil” and expose your personal assets by ignoring your obligation to prepare corporate minutes.