Many business clients ask the question, “What are Corporate Meeting Minutes and why do I need them?” The answer is simple.The California Corporations Code requires corporations to “keep minutes [in written form] of the proceedings of its shareholders, board and committees of the board.” Corp. Code § 1500. In a general sense, the corporate meeting minutes, together with other corporate records, “constitute the ‘memory’ of the transactions of the corporation.” Hurwitz v. Gross, 5 Cal. App. 614, 621 (1907).
Although not required by California statute, meeting minutes typically contain:
- the time and place of the meeting;
- the type of meeting (annual or special);
- who was present;
- who was absent;
- whether notice was provided or waived;
- the motions acted on;
- the resolutions made; and
- when the meeting adjourned.
Meeting minutes should be accurate (Corp. Code § 1507) and complete; however, they do not need to include every minute detail of the discussions had at a particular meeting. In addition to the statutorily required annual meetings, corporations regularly hold meetings, or prepare unanimous consents of shareholders and directors in lieu of actual meetings, to memorialize significant events, including but not limited to, the purchase of a company vehicle, the leasing of office space, the opening of a new bank account, the commencement of a new stock option plan, and the hiring of employees.
Although not dispositive, the failure to maintain corporate records may be used as evidence to support a claim of “piercing the corporate veil,” which may lead to the corporation’s officers, directors, and shareholders being held personally liable for the debts and other liabilities of the corporation.
If your corporation has never prepared corporate meeting minutes or has not prepared minutes for the last fiscal year, or you’re not sure if the corporation’s records are properly maintained, contact the experienced corporate attorneys at The Loftin Firm, P.C. for a full analysis today.