While keeping accurate and formal minutes may not seem like that big of a deal, if your corporation should ever run into trouble, your minutes can constitute important evidence of what went on during shareholder meetings and meetings of the board of directors that can often clear important people of wrongdoing. Minutes are considered to be an official record of what went on and are as vitally important to proper record keeping as having accurate books. Let’s take a look at some of the finer points of keeping proper corporate minutes.
Although rules and regulations vary from place to place, some jurisdictions consider minutes to be a required part of being a corporation. Some jurisdictions actually require that minutes be filed every month or at least once per year with the proper regulatory agency in the name of transparency and corporate good will. Of course, altering or doctoring minutes is incredibly simple and is often done to protect trade secrets, but this can lead to widespread accusations of impropriety should those minutes ever be needed to be read in court or by anyone outside of the corporation.
The penalty in these jurisdictions for altering, doctoring or simply not filing minutes can be quite strict. With the recent spate of corporate scandals like Enron, Adelphia and Worldcom, regulatory agencies from coast to coast are expressing a new interest in corporations filing accurate and unadulterated minutes.
Most people are familiar with the idea of keeping minutes during a meeting of the board of directors for a major corporation, but it is also required in many areas to keep minutes for shareholders meetings, as well, especially during the one annual meeting that all corporations have with shareholders, although some corporations have more than one. The minutes from one of these shareholder meetings usually reflect changes to the corporation such as electing new officers to the corporation, adopting or changing any policies that affect the whole corporation, creating committees within the corporation and assigning them responsibilities, the selling and issuing of stock to the public or for use inside of the corporation itself, the sale of company assets or the change of company assets in any way, shape or form, looking at, approving or turning down mergers of any kind, changing employee benefits or pension plans, approving or denying any types of loans for the corporation and starting or ending joint ventures. These are just a handful of the issues that corporate minutes can cover if they are brought up at a shareholders meeting, so you can see why regulatory agencies would be interested in reading them if something goes wrong.
Writing minutes also has its own particular format, much like writing shorthand. First, the minutes should show where the meeting took place and how long it was, who was there, who spoke and about what. Each company can have their own minutes format as long as all of the necessary information is included. Often the minutes will be typed up and distributed to everyone who needs a copy, including the government.