Here at ISLLP, we use the new year as an opportunity to set our goals and focus for the upcoming year. As a business owner or manager, you should also take this opportunity to set your goals and to make sure that your business is running at optimal efficiency.
A part of that process is to plan ahead and take steps to avoid problems you can foresee as a possibility. One of the first items to take care of is making sure that your business complies with corporate formalities required by law, your own Bylaws or Articles, and general business prudence. If you are organized as a Corporation or LLC, you want to protect your personal assets against certain sorts of business liabilities. But if you make the mistake of consistently failing to comply with the corporate formalities, you run the risk of exposing your personal assets to satisfy corporate obligations.
At a minimum, your Board of Directors or Managing Board should meet at least once a year, even if you are the sole Director and sole Shareholder. You must properly document in your records that you complied with this formality. In addition, the shareholders (or Members, if you are organized as an LLC) should conduct an annual meeting. Both types of entities can meet the formality requirements without a meeting, by following the proper procedures.
In addition, a Statement of Information must be filed with the Secretary of State.
If you are busy and just don’t have time to take care of this paperwork, we’re available to handle this at a low fixed cost of only $395 (which includes filing fees for the Statement of Information form, if required), and help to avoid potentially major headaches. To start the ball rolling, send an email to Eric Samuels with the subject line “2014 Corporate Formalities” in order to have our office ensure that your company complies with the minimum requirements in 2014.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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