There are a few odds and ends companies should review at the beginning of each year. This includes updating your company’s goals, holding an annual meeting, cleaning up your website, and double-checking your inventory. These tasks keep your company running smoothly—and growing steadily. For purposes of this briefing, company and corporation refers generally to both Limited Liability Companies (LLC) and Corporations.
Report Changes to the State
If a company is registered as an LLC or a corporation, it must report certain changes to the state. Some of the possible modifications the state will want to know about include, if applicable:
· The company has changed its name.
· The company has a new address.
· The company authorized more shares to be sold or added a new class of stock.
· The company has had a change in ownership
· There has been a change to who is serving on the entity’s board of directors or board of managers.
To report significant changes like those listed, the company must file an Amendment to the Articles of Organization or Certificate of Incorporation with the Department of State and pay the associated fee. Having up-to-date details filed with the state is essential for keeping a company in good standing and maintaining the “corporate veil” that protects the company’s owners or shareholders from having personal liability for the company's legal issues.
Annual Meetings
Nearly every state requires corporations to hold annual meetings with their shareholders, members, owners, and directors, and even if they don't, a company’s governance documents might require an annual member meeting.
As an overview, you have a few options:
1. A meeting with shareholders (members) and directors.
2. A meeting with shareholders (members) and directors with an attorney present to
assist in coordinating the meeting and keeping track of items discussed and
resolved.
3. A resolution in lieu of an annual meeting.
An annual meeting is where important decisions are made for the year and to make sure the shareholders, members, owners, managers, and board members are all on the same page. An important part of holding annual meetings is recording items discussed, actions approved, or disapproved, through meeting minutes. At this meeting, you’ll likely reappoint the directors and the directors reappoint the officers – companies will want to check their Operating Agreements (LLC/PLLC), Bylaws (Corp./P.C.), and Shareholders Agreements (Corp./P.C.) to make sure the appropriate formalities are adhered to. To stay compliant with relevant law, it’s important that you treat your corporation separately from yourself and holding annual minutes is one way of evidencing compliance with the law.
Corporations are accountable to their members. Annual meetings are the main way for members to interact with the board and management—to ask questions, express views and vote on matters. Even small businesses, one or two owners even, should still have some semblance of an annual meeting.
Send out the notice to those required to attend with the agenda and any required papers (either attached or letting members know how to access them). Normally there is a time frame in which notice must be given—check your Shareholders Agreement, Bylaws, or Operating Agreement.
Your company’s governance documents may also include a section that allows for a resolution in lieu of an annual meeting. Rather than hosting a meeting, companies and their respective advisors could prepare a resolution to include sections approving the changes to the corporation or consenting that no changes have been made.
Our firm has extensive experience counseling employers/businesses and others on statutory requirements, as well as preparing and implementing applicable policies. Please note that any embedded links may expire in the future. If you have any questions related to this Legal Briefing, please contact any member of our firm at 585-730- 4773.
This Legal Briefing is intended for general informational and educational purposes only and should not be considered legal advice or counsel. The substance of this Legal Briefing is not intended to cover all legal issues or developments regarding the matter. Please consult with an attorney to ascertain how these new developments may relate to you or your business. © 2023 Law Offices of Pullano & Farrow PLLC