If you have a corporation for your startup, you’ve hopefully elected or appointed officers, and one of those officers is the corporation’s secretary. It is the secretary’s job to keep the corporate records, such as the corporation’s articles of incorporation and bylaws, and to keep minutes and records of the corporation’s meetings. “Wait,” you interject, “what are ‘minutes’?” Hopefully, you’ve been holding meetings of the board of directors (or of shareholders, if the corporation is directly managed by them) to decide significant corporate decision, such as amending the articles of incorporation or bylaws, the appointment or election of new directors or officers, selling stock in an equity financing event or as part of employee/contractor compensation, or taking on debt (including opening a company credit card), among other things. State laws and the corporation’s bylaws require a corporation to keep minutes of its meetings, and to make those minutes available to shareholders on request. It is generally the secretary’s responsibility to take the minutes of a meeting, although another person can be appointed to this task in the absence of the secretary. Minutes should record several items of information, including: – When the meeting was called to order and adjourned – Who was present at the meeting, including if any attendees arrived or left early or late or objected to the holding of the meeting – What items of business were discussed at the meeting – What corporate actions were approved (including which attendees, if any, objected to the action) Only a handful of states, Delaware chief among them, do not require meeting minutes. It is also important to note that the minutes requirement is only imposed upon corporations; to my knowledge, no state requires a LLC to keep minutes of its meetings. Lest you think that a small startup with only two or three founders working on it at the moment needs to have a meeting anytime they want to take a corporate action, most, if not all, states authorize both shareholder and board of directors action by unanimous consent, also known as a consent meeting. A consent meeting negates the need for shareholders to directors to meet in person or by teleconference, and simply authorizes an action to be taken. A consent meeting document should describe the action to be taken, and the signatures of all shareholders or directors entitled to vote upon that action. Bear in mind that, as the term ‘unanimous consent’ implies, an action by unanimous consent or consent meeting is valid only if *all* the persons entitle to vote on an action consent to the action. If only a majority of shareholders or directors approve the action, it is necessary to hold a full-fledged meeting and have the action approved by the necessary majority required by state laws, the articles of incorporation, and/or the bylaws.
Leave a Reply