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Record-Keeping
Proper observance of corporate formalities and recordkeeping requirements is critical to the continued good standing of your corporation.
Observing Corporate Formalities
Once a corporation is formed, the obvious priority is to ensure that your business thrives from your efforts and maintains stability through your management expertise. However, because a corporation is considered a separate, legal entity, separate and apart from its owners, directors, officers, and employees, certain formalities must be observed in order to maintain this Good Standing and thus
retain a strong “Corporate Shield”
The following list presents issues you should consider when observing corporate
formalities:
Corporate Formalities Checklist
- Are meetings of the Board of Directors regularly scheduled and conducted?
- Are Shareholder meetings regularly scheduled and conducted?
- Do such meetings adequately cover the business that is currently being conducted in the corporation?
- Do meetings provide Shareholders and/or Directors with agendas and goals along with the necessary background information necessary to make an informed decision?
- Are these materials provided to the Shareholders and/or Directors in advance of the meeting?
- Do Directors have a reasonable opportunity to add items of concern to the meeting's agenda before the Directors meet?
- Are agenda items acted upon; or, rather, are they postponed and advanced to future meetings?
- Does the meeting provide adequate time for Board Members or Shareholders to discuss each agenda item?
- Is each Director and/or Shareholder afforded a reasonable opportunity to discuss each issue?
- Are Corporate Minutes of each meeting accurately recorded by the Secretary?
- Does the Board meet with and/or receive direct reports from legal counsel, accountants, or other outside advisors? Are these reports included with the Corporate Minutes?
- Are the Corporate Minutes of Board meetings reviewed at subsequent meetings?
- Are the Corporate Minutes amended or corrected for clarity and accuracy?
- Are the dissents to the Corporate Minutes duly recorded?
- Do Board Meetings adequately cover substantive policy issues involving the corporation, rather than only trivial or administrative detail?
- Is the Board Chairperson effective in conducting Board meetings?
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