Even though your Ohio business may be a limited liability company or a corporation, you may still be subjected to personal liability if you fail to document your company or corporation minutes and records. To avoid this, you’ll always want to maintain all corporation or company minute notes and update your records.
In this post, we’ll discuss why keeping accurate minute notes and records is so important.
Why are Minute Records Important?
The reason why company or corporation minute records are important is because a corporation or company is a separate or taxable entity that operates apart from any person. All of its actions must be approved, ratified and memorialized in a Minute Book. The Ohio Revised Code requires each corporation or company to keep correct and complete records of the minutes and records of its shareholders and members.
What Goes in the Minute Book?
While not every action must be listed, there are certain types of minutes that must be kept and certain actions that must be recorded. The Internal Revenue Service requires that the Minute Book be up to date. You must include minutes of the annual meeting of the shareholders or members.
The minutes of the annual meeting of shareholders or members should include the following:
- Identify the date, time, attendance and type of notice for a meeting, or the waiver of meeting if by written consent.
- Adopt and ratify the actions of the officers, directors, and employees of the corporation as corporate acts, since the last annual meeting.
- Elect directors.
- Review and adopt financial statements of the corporation.
- Adopt an amendment of the Articles of Incorporation or of the Code of Regulations.
- Elect officers of the corporation.
- Declare and authorize the payment of a dividend to all shareholders of record.
- Authorize the purchase of equipment and/or other items of personal property for the corporation.
- Authorize the president to enter into contracts for the purchase for, and the treasurer to pay for, the purchase and/or lease of items of personal property without specific authority of the directors, if the value of said purchase or lease is less than a specified sum, such as $1,000.00.
- Adopt and ratify employee actions and specifically if they are shareholders and/or officers.
- Document the business necessity for excess earnings accumulation.
- Authorize retirement, pension, or profit-sharing plans.
- Authorize and substantiate fringe benefit arrangements.
- Authorize a buy/sell agreement among shareholders and/or the fair market value of transactions between shareholders and/or other related parties, and the corporation.
- Discussion of pending litigation.
- Authorize the borrowing of funds and/or the use of a line of credit for the corporation.
- Authorize the purchase of other business, or the merger, consolidation, or sale of the corporate assets.
- Any other matters which the directors deem necessary and worthy to be included in the corporate minutes.
Reports to File
The following is a listing of the federal and state tax returns and other reports required to be filed at the appropriate times by most Ohio corporations. Specific questions should be addressed to the corporation’s accountants or legal counsel.
- Federal Income Tax: Obtain Employer Identification Number by using Form SS-4.
- State Franchise Tax (income tax return).
- State Personal Property Tax Return (filed with County Auditor).
- Federal Withholding and Social Security Taxes on Employees.
- State Withholding Taxes on Employees.
- Federal Unemployment Tax Return.
- State Unemployment Tax Return.
- State Workers’ Compensation Tax Return.
- State Sales Tax Return.
- Vendor’s License (County Auditor).
- Other potential tax or other returns which may be filed, based on type of business: Use Tax, Real Property Taxes, Municipal Income Taxes, Financial Institution Taxes, Motor and Marine Fuel Taxes, Utility Service Tax, Cigarette Tax, Highway Use Tax, Alcoholic Beverage Tax (State and Federal), Professional License Fees, Industry-Specific License Fees.
Need Help with Your LLC or Corporation?
If you have questions about protecting your LLC or corporation, The Law Office of Tom Somos, LLC can assist you. Reach out to chat with our team today.