LLC Organizational Meeting Minutes
LLC organizational meeting minutes usually reflect any major changes and/or actions within the LLC and will often outline new business plan directives.3 min read
Process for Keeping Meeting Minutes
There are several processes to follow when taking organizational meeting minutes. These include:
- Introducing the meeting with the date and time. This will be noted in the "Notices" section. State that enough members were in attendance to create a quorum and allow a meeting and voting on decisions.
- The next section should list any actions for the LLC in the coming months.
- The minutes are signed and dated by the secretary. For a single-member LLC, you would serve as both the secretary and the president.
- Retain a copy of the minutes and file in a binder along with the LLC registration information and your member certificate.
About Limited Liability Companies
A limited liability company is organized under the state laws where it is registered, which means the required formalities of forming an LLC will vary from state to state. Under most circumstances, an LLC is not held to the same requirements as those for a corporation, which are business structures that usually maintain and record minutes of the meetings.
An LLC is usually managed following what has been outlined in its operating agreement, which serves as a contract of sorts for the owners. The owners, also known as members, have access to the freedom of contract law to utilize when structuring the business relationship. This makes strict formalities unnecessary.
LLCs are not required to hold regular shareholder or board meetings, so there are no minutes to record. The managers of an LLC are subject to the members. but this does not require formal meetings among the members since the operating agreement reflects the terms set forth by the members regarding the business.
With no operating agreement in place, there is no requirement for members to record minutes of any meetings. The reason is the members are accountable only to each other.
Single-Member LLCs and Minutes
Keeping organizational minutes when you are the only member of a limited liability company is not a necessity as there are no discussions, decisions, or disagreements to be noted. While annual meetings are usually held for voting purposes, with a single-member LLC this is also not necessary, in general, but there are situations when keeping minutes of an annual meeting can be beneficial. In this case, the minutes are recorded in the same way as when recording a multi-member LLC meeting.
The point being, you may currently have a single-member LLC but that could change at any time as your business grows. By recording the actions of the LLC in a clear and concise manner, the single member maintains a separate stance from the LLC and personal finances. This is especially important if an investor, lender, or the court needs to define the owner's role versus the LLC. An LLC provides liability protection to the owner, but lines get blurred when personal assets are commingled with those of the LLC.
It's a common practice for single-member LLC owners to conduct an annual meeting with a professional advisor such as an accountant or attorney to discuss the business direction and how to keep it protected. Although it is an added expense to hire professionals, it pays off in the long run by making sure you are moving the LLC in the right direction.
During the meeting, topics that may be reviewed include the budget for research, marketing, travel expenses, and development. The minutes taken are generally an overview of changes and direction of the business versus the day-to-day running of the LLC.
About the Organizational Meeting Process
When an organizational meeting is scheduled for an LLC, several steps take place:
- Review and agree to the initial capital contributions to the LLC by its members.
- Memorialize membership interests such as issuing certificates or memberships.
- Make a resolution to open a business bank account.
- Resolve to begin business operations.
- Agree to the income and expenses generated by the LLC on an annual basis will be reported to the Department of Revenue.
- Decide on the date when the next annual meeting will be held or decide if there will be no annual meeting.
- Document any other business matters pertaining to the LLC.
- Adjourn the annual meeting.
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