CALIFORNIA CORPORATE MINUTES
In California, when you incorporate, the bylaws for a corporation should discuss the necessity for holding meetings of the shareholders and directors. At the conclusion of the meetings, a written record of what was discussed and decided at the meetings should be created.
There are three ways to make and document the decisions made or reached by a corporation's shareholders and board of directors. The first way is to hold real meetings. Shareholders and directors can get together in a real meeting and discuss corporate business. Votes are taken and noted in the written minutes. The written minutes are prepared showing the date, time and place of the meeting, as well as the action taken at the meetings. The second way is have "paper" meetings with minutes. The directors and shareholders informally agree on specific actions to be taken by the corporation. Written minutes are then prepared. The third way is to take action by way of written consent. This is accomplished by the directors and shareholders signing a written consent form.
California corporate minutes and consent forms serve two purposes. The minutes show the history of important decisions. They show how the decisions were made and who made the decisions. The minutes also document important decisions that later may be the subject of an audit or litigation. At times, the IRS will demand to see the corporate minutes when it audits corporate tax returns.
When you incorporate in California make sure you remember to keep your corporate minute book up to date.
