As a client of Frost Law, it is our responsibility to ensure that clients are taking the necessary precautions and steps to ensure all best practices are in place. An important matter that has come to attention at the firm is the lack of focus on corporate minute books by businesses both small and large.
A corporate minute book is a vital tool to keep track of the company’s important records and documents. The purpose of a minute book is to consolidate all important documents in one easily accessible and organized location. Corporate minute books are overwhelming and extensive, as they carry all critical information regarding the corporation. Typically, they include the articles of incorporation, company bylaws, share certificates, resolutions, minutes of all meetings of directors and shareholders, a directors’ register, securities’ register, officers’ register, expense reimbursement policies, and leases. All decisions made by the board of directors should also be included in the corporate minute book. These books can be held electronically and/or through physical documentation; the goal is to have them available for visual inspection within a reasonable amount of time. Minutes must be recorded in a written format, but can be maintained as a reproduction. (Maryland Code 2-111).
Corporate minute books are significant because they provide a forum to satisfy Maryland Code that requires a correct record of accounts, transactions, stockholders, and board of directors meetings, and other documents (Maryland Code 2-111), as well as requirements set forth by the IRS to track corporate activities. If these books are not organized efficiently and updated consistently issues can arise. Possible instances where a corporate minute book would be utilized are an IRS audit, company merger and acquisition, agreements, and other legal matters. These examples will bring attention to company minute books; therefore, if books are not kept effectively the company may delay or hinder imminent business ventures and future growth opportunities. The bottom line is that a detailed and organized book will protect the company and the shareholders.
As every corporation is different, Frost Law can bring a specific and dynamic approach that will fit your company’s need for a corporate minute book. By allocating resources to ensure proper minute books are kept, the corporation is reducing the liability of later damages.
There are numerous best practices that Frost Law has found to be effective. These can be applied to your firm and adjusted to maximize benefits and minimize the waste of resources.
To inquire about corporate minute books or speak with a team member in our Business Department, contact: (410) 497-5947.