There is a reason why corporations, as legal entities, have existed for a century and a half. Above all, it promotes communication and clear decision making.This document then becomes a substitute for holding a meeting. Each of the members must sign this document to satisfy the meeting requirement. Rather than holding a meeting, the owners of an LLC, also known as members, can draft a document detailing the actions they wish to take on behalf of the LLC. This is termed a unanimous written consent in lieu of meeting. And in times in which it is difficult for all to meet, such meetings can be via Zoom or conference call or even a later consent in lieu of the in-person meeting.It is useful in demonstrating actions and decisions to various governmental bodies from licensing boards to the IRS.It can have the CPA or attorney attend to provide accounting/tax/legal input.It solidifies in the minds of all the separate and corporate nature of the decision making in the entity and allows the give and take often needed for business decisions in a formalized setting.It keeps a long-term record of progress (or lack of progress) on various plans and proposals.The record will eliminate later contradictory claims of what was decided and who supported what decision.It keeps an excellent record of key events in the company and forces the owners to meet and confer on strategy, ownership and issues confronting the company.There are other, perhaps even better reasons to have formal meetings and minutes. Only when combined with other actions, such as executing contracts using a name that is not the LLC, commingling assets, misrepresenting its status and the like will limited liability be at stake…but it is a factor that a trier of fact can use in determining if, when combined with the other wrongdoing, the entity should not have limited liability. The mere failure to hold meetings or have minutes of same in an LLC will not eliminate its limited liability. The operating agreement can require such meetings, but most such agreements do not. But the LLC law, itself, requires no later meetings or minutes. Note that the initial creation of the LLC did require a written operating agreement and articles of organization, both of which are filed with the state. There is no statutory or case law requirement for LLCs to have formal meetings or minutes of same. There are other advantages of keeping minutes of regularly scheduled meetings as well as discussed in this article.
#Who signs the minutes of a meeting trial#
Or, as one trial counsel stated to the writer when defending against an attempt to pierce the veil before a jury, “If I can slap down on the table five years of minutes which they can then bring to the jury room, then you can bet the veil will not be pierced…”
Commingling of personal assets with the entity assets and misrepresentation of status to third parties are typical and important aspects of claims to pierce but failing to observe entity formalities (separate accounts, the entity signing all contracts, failure to have meetings and minutes) can also influence the trier of fact in concluding that limited liability should not be allowed. Piercing the corporate veil is a doctrine which allows a creditor to impose personal liability on the owners of a limited liability entity if the owners failed to act in a manner which supports the independence of the entity. While it makes it easier to operate the company, it can act to erode one of the most useful aspects of the entity, namely its limited liability status. Unlike a corporation where bylaws and board of director and shareholder meetings are required annually, a LLC, in its operating agreement, can forgo that requirement and allow the owners to operate without having such formal proceedings and keeping records of same.
Many businesspersons chose a limited liability company (“LLC”) instead of a corporation when commencing operations for the simplicity of its procedures.
0 kommentar(er)
