Updating corporate minutes

Although the life of a corporation is theoretically everlasting, certain voluntary and involuntary actions by corporate shareholders can cause the company to be declared inactive by the state.Each state has its own rules for restoring a corporation to active status, which can involve the payment of penalties and applying for reinstatement.Also, the bylaws of many corporations require their board of directors to have an annual meeting.Of course, small corporations in particular often have informal “meetings” where these matters are decided.

One of the major benefits for a small business owner in choosing to form a limited liability company, or LLC, over a corporation is that maintaining the formalities for an LLC is a simpler process.Bylaws set forth the internal rules and procedures for running your corporation.There is no set form that bylaws must take under federal or state law, and you need not file these documents with any government office.If the owners of a corporation or LLC do not maintain legal formalities, a creditor may be able to pierce the corporate veil and hold the business owners personally responsible for business debts.Unlike a corporation, however, an LLC is not required to hold annual meetings.

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