Board Meetings and Other Corporate Formalities
A corporation should follow proper corporate formalities to comply with applicable laws and maintain its corporate existence. Any failure to follow these formalities could result in the loss of corporate status, loss of limited liability, leaving the owner and shareholders personally responsible for corporate debts, and potential loss of corporate tax benefits.
Corporate formalities fall into the following general categories:
- Shareholder and director meetings (see Director Meetings for Corporations);
- Signing documents as a corporation;
- Corporate record keeping (see What Is a Corporate Records Book?);
- State annual filings (corporate report, franchise tax, federal and state corporate tax);
- Bank accounts (separate corporate bank accounts);
- Financial statements (income and cash flow).
A huge part of following proper corporate formalities is about creating and maintaining good records. The types of records you can be expected to keep for your corporation include the following:
- Accounting and bookkeeping records;
- Bank records; contracts;
- Corporate records;
- Employee records;
- Business forms;
- Intellectual property records;
- Marketing and advertising records;
- Permits and licenses;
- Stock records;
- Tax records.
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