Every corporation must keep accurate records of its most important meetings. This administrative requirement can actually help protect a corporation if it’s later sued and outside parties try to learn which executives approved certain activities and which ones opposed them.
In general, minutes should be kept regarding all high-level meetings between corporate executives, the board of directors, and shareholder meetings. When corporations are sued, corporate minutes and the truthful statements of high-level officers can be used to prove what certain parties knew -- and when they knew it.
One common type of news story that clearly illustrates this situation occurs when corporate car manufacturers are sued regarding when certain safety defects were first discovered -- and what actions, if any, were taken to immediately correct them.
Why Corporate Minutes Should Be Fully Accurate Yet Succinct
Of course, there is always one danger and that involves keeping minutes so thorough that they may unnecessarily expose executives to alleged improprieties when they only had suspicions or concerns (as opposed to actual facts) regarding a potential liability issue. For this reason, general discussions regarding hypothetical situations should probably not be included in the minutes. (Corporate minutes should arguably be somewhat like a doctor’s notes, accurate but discerning in terms of details provided).
The following list outlines the types of decisions that should normally be documented in meeting minutes to protect the corporation.
Important Decisions and Votes You Should Record in Your Corporate Meeting Minutes.
Regarding shareholder votes/activities
Shareholder meeting minutes should always include an accurate record of the votes cast to elect or remove members of the board of directors – clearly indicating which shareholders voted for or against certain candidates/seated directors;
An accurate record of which shareholders supported or opposed the sale of a large percentage of corporate assets;
Clear indications of the votes cast by individual shareholders regarding any proposed corporate mergers or acquisitions;
Official votes taken regarding the proposed dissolution of a corporation – or its possible need to file for bankruptcy;
Regarding directors’/corporate officers’ decisions
Their election of corporate officers, clearly indicating which individuals voted for or against specific candidates;
All decisions made (votes for/against)to issue new stock or dividends;
Clear records indicating which parties voted for/against the need to obtain new loans from financial institutions;
Decisions made about changing the current line of products – or making substantial design changes to existing products/models. It’s important to note the precise votes of every director or officer involved;
Votes cast on changing different corporate employees’ salaries and benefits;
Decisions tied to selling large amounts of property owned by the corporation.
While this list is not comprehensive or exhaustive, it should help someone keeping the corporate minutes gain a better understanding of the types of decisions that should be detailed in such records.
To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today. You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.