Whether your business entity is a corporation, limited liability company, limited partnership or other entity created under the Texas Business Organizations Code, there is a legal requirement to conduct and record certain business meetings in order to maintain the protections of the entity status for individual owners and managers
- Usually, a formation or “organizational” meeting of ownership (e.g., shareholders or members) is necessary at which management is voted in.
- Annual meetings of ownership are required to elect board positions and make other fundamental entity decisions.
- Meetings of the board of directors of a corporation or board of managers of an LLC are held as needed but are required annually to appoint officers whose job it is to run the organization on a day-to-day basis.
- Minutes are required to be maintained by the entity, signed by requisite participants; however, minutes can be created at any time to memorialize the past meeting(s), even years later.
- Although a single individual can own 100% and hold each office in an entity, the formality of meeting minutes is still required but does not have to be formal.
- All transfers of ownership of the entity must also be accounted for in the “corporate books”.
- If the “corporate books” are not kept or brought up-to-date, officers and managers and owners risk personal liability for acts of the entity by losing protection of the “corporate veil”.