"Board of Directors meetings" for clients corporations

[Judy rocks]

I need to do some board of directors meetings for clients corporations. I was thinking of using a service for this. I understand that there are attorneys who can do a board of directors meetings for my clients each year with a 5 minute phone cal. Are there any recommendations on services to do this? Can this be done online? Are there any good / bad war stories on using a "board of directors meetings" attorney service? For new corporations is the first meeting after 12 months or do we need one initially? Is there any kind of a publication or written article that gives good guidance on how to make sure I'm handling this correctly for my clients?

[Burke]

For new corporations is the first meeting after 12 months or do we need one initially?

Usually there is an initial meeting to elect officers, if nothing else. Depending on the corporation, there may be other items that need to be determined up front.

[Roland Slugg]

I need to do some board of directors meetings for clients corporations.

I assume you are referring to preparing minutes for past meetings, not "doing" the actual meetings themselves.

Many business attorneys do that sort of thing, for a fee, of course, and this might be the prudent way to deal with this. Expect to pay at least $500 per year for this ... probably more like $1,000 or even a little more. The attorney will know what needs to be covered in BOD meetings, and the minutes will reflect all the necessary documentation.

Once a company's owner(s) gain a good understanding of what should be in the minutes of BOD (as well as shareholder) meetings, there's no reason why he/they can't write them up themselves ... saving the attorney's fee. By and large it's all pretty much boilerplate. And, yes, there are many places you can look online to find examples of minutes.

Although most small corporations typically have just one BOD meeting each year, there is no reason why there can't be more. Director meetings aren't limited. All large companies and many smaller ones have regular BOD meetings on a quarterly basis, and sometimes there is even an extra "special" BOD meeting to discuss and vote on a specific issue or decision. Regardless of their frequency, each BOD and shareholder meetings should have its own written minutes.

[Stringbean]

Real World

Just out of curiosity, if you have 20 corporate clients (1120 plus 1120-S), how many of them have annual meetings and minutes?

We tell them to do this, their attorneys tell them to do this, they KNOW they're supposed to. But it is easier to try to push a rope uphill than to get these folks to do so.

If they don't do so, what are supposed to do? refuse to do their tax return?

I'm going to say maybe 15% of my corporate clients do so. That would be 3 out of 20. For purposes of this question LLCs are not included.

[taxea]

I would think that the State department that the S-Corp is required to file with would have a form for this purpose.

[JohnH]

Doubtful

Highly doubtful. Most secretaries of state specifically say they don't provide coporate governance documents. If they did, every lawyer in the state would be up in arms over the SOS engaging in the practice of law which would cut into their revenue.

I suspect lawyers in most states even object to the SOS providing organization documents. But maybe in the long run it probably helps their revenue since they get to charge big bucks for straightening out the messes some people get themselves into.

[Judy rocks]

Who to call

Ok so the best way seems to be tell the client it will cost him 500 to 1000 for a year or 2 to work with the attorney until he learns how to do it himself. After working with the attorney for a few years he will have learned enough that I can answer his questions by email and he can save himself the fee. What kind of attorneys specialize in this?

[kathyc2]

Ok so the best way seems to be tell the client it will cost him 500 to 1000 for a year or 2 to work with the attorney until he learns how to do it himself. After working with the attorney for a few years he will have learned enough that I can answer his questions by email and he can save himself the fee. What kind of attorneys specialize in this?

Pretty much any attorney other than those that deal strictly criminal law can do this. Personally, I would NEVER tell a client that they should be DIY as far as legal matters go. If they decide to go that route on their own, that's up to them but they will not get that recommendation from me.

[jsamans]

Pretty much any attorney other than those that deal strictly criminal law can do this. Personally, I would NEVER tell a client that they should be DIY as far as legal matters go. If they decide to go that route on their own, that's up to them but they will not get that recommendation from me.

Preparing minutes isn't like preparing contracts or writing a will. They're not "legal matters." Minutes are just records of things that the directors discussed. There's a little bit of formatting to them, but almost anyone can be taught to take proper minutes. Even in the regular board meetings of big condo associations with budgets in the eight-figures range, minutes are taken by residents who volunteer to serve as secretary. It's no big deal.

I'm also astonished that people who bothered to form corporations aren't bothering to have regular meetings and record their decisions, and that's where someone should point them to a lawyer. Corporations have formal board meetings so the directors have formal records of what they decided to do in the name of the company, so it's important for purposes of making the activities those of the corporation as a legal person and not the actions of the directors as individuals. No one should form a corporation who doesn't understand that and plan to abide by it.

[Burke]

Preparing minutes isn't like preparing contracts or writing a will. They're not "legal matters." Minutes are just records of things that the directors discussed. There's a little bit of formatting to them, but almost anyone can be taught to take proper minutes. Even in the regular board meetings of big condo associations with budgets in the eight-figures range, minutes are taken by residents who volunteer to serve as secretary. It's no big deal.

And there are any number of private companies who publish books of Corporate forms which can be purchased. These include the formats of minutes', resolutions by the BOD for all sorts of matters, etc. You may be able to purchase such publications at any office supply store and on the Internet.

[kathyc2]

And there are any number of private companies who publish books of Corporate forms which can be purchased. These include the formats of minutes', resolutions by the BOD for all sorts of matters, etc. You may be able to purchase such publications at any office supply store and on the Internet.

Yep, and probably 10 times as many that tell people how they can prepare their own tax returns and set-up QB and correctly keep accounting records. Of course, none of us have ever seen anything go wrong with these DIY'ers have we?

[Burke]

True. But I think tax preparation is a lot more complicated than recording minutes and filling out an annual report of directors for the SCC. It all boils down to whether the corp officers want to take the responsibility and the time for proper documentation. And whether they are involved in loans to-and-from the shareholders, and a host of other circumstances.

[TXEA]

You do not need an attorney to prepare corporate minutes unless there is some type of substantial transaction (such as purchase or sale of business, adoption of a complicated retirement plan, change in shareholders, or the corporation and its shareholders are in conflict).

All that is required is that the shareholders periodically make notes of decisions made, reduce them to writing, put a date on the page, note where the meeting was held and have the secretary sign the notes (minutes).

I generally recommend minutes be maintained in following common business decisions:

1. Officer Salary
2. Shareholder Distributions or Dividends
3. Shareholder Loan
4. Adoption of a SIMPLE IRA or SEP Plan
5. Major equipment purchases
6. Change in officers
7. Significant decisions

Most other things can be handled without minutes by officers duly authorized by the corporation. For example, purchase of a fax machine or computer - officers, purchase of a new warehouse (board of directors and minutes).