Meeting minutes are a written record of what takes place during a formal meeting, such as a board meeting or shareholder meeting. They typically include the date, time, attendees, topics discussed, decisions made, and any votes that took place. For corporations and nonprofits, keeping accurate meeting minutes is often required by law to maintain good standing and document major decisions.
What are Shareholders' Meetings
Every state requires a corporation to have an annual (or regular) shareholders' meeting. This meeting is necessary to elect the Board of Directors and to conduct other regular business (annual reports). Meeting minutes are typically taken during these gatherings. Generally, the bylaws specify the timing and location of the annual meetings. Beyond an annual shareholders' meeting, special shareholders' meetings can also be called for extraordinary actions (i.e. mergers, conversions, etc.) by the Board of Directors.
Notice regarding these meetings is imperative, but state laws generally have basic requirements for notice. For annual shareholders' meetings, notice only requires the date, time, and place of the meeting. For special meetings, the purpose of the meeting should be specified within the notice. Generally, notice should be given at least 10 days, but no more than 60 days before a meeting. All voting shareholders must be given notice, but not all shareholders must be present for the meetings. Generally, states give a default quorum requirement of a majority of voting shareholders. However, states do allow corporations to specify within their bylaws their own quorum requirement. Some states do have a minimum (e.g., Delaware allows quorums to be reduced up to one-third of voting shareholders), but other states have no limitations on how many shareholders must be present.
During these corporate meetings, the chair presents different agenda items, and the shareholders vote. These discussions and decisions are carefully recorded in the corporation minutes or corporate meeting minutes for future reference. Agenda items could include appointing directors to the board, removing directors, voting on shareholder initiatives, and board-initiated transactions that require shareholder approval (i.e. mergers, sale of assets, or dissolution). Voting requirements for each of these actions may differ, so each corporation should look to its state to determine the minimum number of votes required for the approval of any action.
What are Board of Directors' Meetings
The board of directors is responsible for the management of the corporation and so its meetings revolve around that purpose. Typically, directors establish broad policies and objectives for the organization of the corporation; select, support, and review the performance of the chief executive; ensure the adequacy of financial resources; approve the annual budget; assessing to its stakeholders on the corporation's performance; and set its own salary and compensation. Actions that make a fundamental change to the corporation (i.e. mergers, conversions, dissolutions) generally require subsequent shareholder approval. All directors should be notified of any meeting, but not all directors are required to be present at these meetings. The bylaws can specify the quorum requirement for these meetings, but the general default rule is that a majority of directors must be present. For larger corporations (e.g., publicly traded corporation), greater state and federal scrutiny is given. Federal regulation requires greater accountability for various activities conducted by the board. At this point, professional assistance is a necessity.
What are Minutes?
Minutes are an essential part to any meeting and are used as an official account of the decisions made during a board/shareholder meeting. With that said, minutes should remain light. Only information of substance should be included, while extensive details on what was presented excluded. The minutes should also include basic information date, time, and place) as well as the people in attendance (if attendees arrive late or leave early, the minutes should state when an attendee arrived or left with a special note). The agenda items for the meetings, and any voting actions (whether approved or not) should be listed within the minutes. Agenda items should include a brief description of each item, but comments on each agenda item are unnecessary, unless specified by the commentator to be included within the minutes. Voting actions should detail the voting results, including the manner in which individuals voted. Adjournment of a meeting should also be included with the time of adjournment should be listed. Because minutes are used as official documents, participants should be given an opportunity to amend the minutes before making them official.
The Role of Corporate Minutes in Business Governance
- Corporate minutes provide an official record of key decisions made during meetings.
- They help demonstrate that the business is following proper procedures and acting in the interest of shareholders.
- Accurate minutes can help protect directors and officers by showing decisions were made responsibly and with board approval.
- They also support transparency, reduce misunderstandings, and are often needed during audits or legal reviews.
- Well-maintained minutes help maintain the corporate veil and prove the business is being run as a separate legal entity.
Annual Meeting Minutes: A Legal Requirement for Corporations
Corporations are generally required to hold annual meetings of shareholders and directors, and to keep written minutes of those meetings. These annual meeting minutes serve as a legal record of the company's key actions, such as electing officers, reviewing financial performance, and approving major decisions. Failing to maintain proper minutes can risk your good standing or affect your liability protections.
The Legal Importance of Meeting Minutes
Meeting minutes serve as legal proof that your business followed proper procedures when making decisions. They can help protect your company in the event of disputes, audits, or lawsuits by showing when and how key actions were approved. For corporations and nonprofits, maintaining these records is not just good practice, it's often required by law.
Why Businesses Need to Prioritize Meeting Minutes
Well-documented meeting minutes help ensure accountability, improve communication, and support long-term planning. They show that your company is organized and operating with transparency. Prioritizing minutes also strengthens your compliance posture and reinforces your business's commitment to good governance.
Final Thoughts on Corporate and Shareholder Meeting Minutes
Meeting minutes are more than just paperwork, they're a core part of running a responsible business. Whether you're holding an annual shareholder meeting or a special board session, documenting what takes place keeps everyone aligned and protected. Taking the time to create accurate minutes is an easy step that goes a long way.
