Meeting Minutes: 10 Ways Meeting Minutes Benefit for Your Business
10 Reasons Why Your Company Needs Meeting Minutes
LLCs and corporations are popular among business owners for many reasons. Perhaps none of these reasons is more appreciated than the personal liability protections afforded by both. While these protections are extensive and will in most cases shield your personal assets from creditors, they are by no means absolute. LLCs and corporations must follow certain protocols and procedures in order to maintain the business’s corporate veil. Unfortunately, too many business owners underestimate the role that keeping good records and meeting minutes plays in keeping up the corporate veil and, consequently, enjoying liability protection.
So, what good can meeting minutes do for you?
Superior Legal Protection
Liability protection should always be at the forefront of your mind when running a business. Unfortunately, the protections offered by corporations and LLCs aren’t absolute. Meeting minutes serve as evidence of the actions taken and considered by the company’s leadership. Courts and tax officials also accept them as legal documents. If there’s any dispute over what occurred, your minutes will back up your side of the story. And if you don’t have those minutes, unfortunately, you won’t be able to convince anyone at the IRS to take you at your word.
Protects You from the Decisions of Others
In addition to the actions taken and discussed, meeting minutes also track which directors or members voted for what item. This prevents blame from being shifted from one person to another. However, it also factors into liability protection as well. For example, if an individual doesn’t vote with the majority on an issue that ultimately leads to a lawsuit, it can help shelter them from responsibility in the suit.
Promotes a Culture of Accountability
This benefit is similar to the above but warrants its own moment in the spotlight. Properly taken minutes promote accountability, responsibility, and also help minimize disputes, even if it can’t eliminate them entirely. This is done by making note of who is responsible for what task, as well as who proposed that great idea that everyone else wants credit for. Doing so makes it harder for slackers to deflect blame or otherwise pass the buck down the line.
Keeps Everyone on the Same Page
Meeting minutes are a great tool for reducing confusion and ensuring that everyone is on the same page when it comes to getting started on a new project. Minutes are flexible and don’t have to be taken in real-time. It’s perfectly acceptable to record them after the fact. Should someone be absent from a meeting or vote, the minutes can help keep them from falling behind or out of the loop when it comes to the company’s plan of action.
Leads to a Plan of Action
Few things make you feel like you’ve wasted your time than a meeting that accomplishes nothing. This is another issue that meeting minutes can assist you with. The structure and guidance that good minutes provide can help keep your team focused. Whatever strategy you decide on, detailing it in-depth in your minutes will help everyone stay on track and focus in on the specific role or task that they need to accomplish.
Maintains Continuity and Focus
Many people consider meetings to be a notorious timesink. However, keeping minutes can help streamline things for a more efficient process. Properly recorded notes waste no time trying to recall prior meetings. They can also help track otherwise unrelated concerns without derailing the conversation halfway through the meeting. This costs valuable time and information, and can make employees feel unappreciated or ignored.
Backs Up Your Tax Status
Liability isn’t the only reason that you should be keep meeting minutes. They’ll come in handy when it comes to your taxes, too. LLCs electing for S-Corporation status should make sure that it is reflected in their corporate minutes. The same goes for C-Corporations – the IRS might not recognize your corporation for tax purposes if Florida compliance requirements are not met. Record any spending authorizations, too, especially if they will be deducted later on.
Makes Your Company More Appealing to Banks and Investors
It’s critical to stay on top of your meeting minutes if you want to pursue funding outside of your business. Investors see nothing but red flags when a company doesn’t have the required documents. It implies unprofessionalism at best, and outright negligence at the worst. If you want their money, you’ll need to be able to prove that your business is in order. This is also the case if you want any kind of bank assistance, such as credit or a loan.
A well-kept record of your meetings can also be useful for measuring and showcasing the growth of your company. This proides valuable insights into which strategies are working where your effort is paying off the most. Additionally, being able to show off your company’s success also makes it more attractive to potential investors.
Help With Regulatory Compliance
Here’s a really good reason to take meeting minutes: it’s legally required by Florida law. While Florida doesn’t require corporations to file their meeting minutes with any state agencies, it does require corporations to hold annual meetings and record what was discussed. Keep your recorded minutes for a minimum of three years for regulatory purposes.
FL Patel Law PLLC provides free meeting minute templates to make life easier for you. If your company is in need of corporate housekeeping, contact us today and get your legal papers and corporate documents straightened out starting at $500.