Why Meeting Minutes Are Important For Your Business Entity

Group discussing why meeting minutes are important.

The main reason why meeting minutes are an important is to maintain the business entity’s corporate veil. They are especially important for limited partnerships, LLCs and corporations. This protects the owners from company liabilities, and prevents the owners’ creditors from seizing company assets. Also, keeping accurate minutes can provide evidence for future legal or financial disputes.

Here’s why meeting minutes are important for your business entity.

Meeting minutes offer evidence of key decisions that have been made in the course of conducting business within an entity. A company’s annual meeting minutes should contain a record of events, proceedings and resolutions from the meeting. Specifically, minutes should include such details as:

  • the type of meeting that took place,
  • who was present and in attendance,
  • any actions taken or votes held on matters being discussed and
  • surrounding decisions that were made.

Having an accurate set of minutes is essential for upholding a business entity’s corporate veil. It also provides evidence in the event of a legal or financial dispute.

Document Accurate and Timely Information.

Meeting minutes provide a detailed account of the motions, votes and decisions made during the meeting. It is important to note all information accurately and in a timely manner. That will help ensure that any documents or decisions are preserved for the future. Keeping up with note taking and document filing helps create continuity. It also makes referring back to past events easier in the event of any conflict or dispute.

Clarify Decision Making Processes and Accountability Logistics.

Meeting minutes also provide a point-by-point account of the decision making processes. This is pivotal in helping to clarify who voted, who opposed, and what actions need to take place that were decided upon. In addition, the proposed due dates for follow-up tasks and assignments are often listed in the minutes. In that way, specific people are held accountable for their designated responsibilities.

Create Records To Cite in Legal Proceedings and Compliance Audits.

Meeting minutes can be an important documentation tool if your business needs to pursue legal proceedings or gets audited by the government. Records of all decisions and policy changes can be referenced in the minutes. Having them on file is proof that they were adopted legally. Also, any litigation that might occur against the company will have meeting minutes as a key piece of evidence.

Promote Open Personnel and Shareholder Communications.

Meeting minutes ensure that communication between the board of directors, personnel and shareholders is kept open. It ensures that everyone is kept up to date on any changes and decisions in the company. This type of documentation also makes it easier for companies to prove that these meetings took place. Furthermore, the minutes are often used to provide proof to government agencies if necessary.

Have Questions About Why Meeting Minutes Are Important?

Give us a call if you have any questions at 602-443-4888.

 

ABOUT THE AUTHOR

Founding attorney Paul Deloughery has been an attorney since 1998, became a Certified Family Wealth Advisor. He is also the founder of Sudden Wealth Protection Law.

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