Organizational Meeting: Everything You Need to Know
An organizational meeting is held when a corporation or similar business structure is formed.3 min read
An organizational meeting is held when a corporation or similar business structure is formed.
What Is a Corporate Organizational Meeting?
Important tasks should be executed at a corporate organizational meeting including:
- Drafting articles of incorporation (also called articles of formation, formation documents, and articles of organization)
- Distribution of initial shares
- Officer elections
- Drafting and approving the corporate bylaws
Those named as initial directors of the corporation in the articles of formation can hold this meeting. If the formation documents do not name any directors, the meeting should be held by one of the members of the corporation, also called an incorporator.
When the incorporators and the elected board of directors all meet to organize the company, the corporation is born.
Other issues can also be tended to during the organizational meeting like electing S corporation status or choosing certain insurance and benefit plans.
Before the meeting takes place, it can be helpful to prepare any forms to be used while organizing the corporation, like meeting minutes templates, tax documents, stock certificates, and more. Once the meeting is finished, an incorporator should double check that all important forms and documents have been signed by the necessary parties.
Corporate Organizational Meeting Agenda
An agenda for the organizational meeting might look like this:
- Signing of the waiver of notice for the organization meeting
- Documentation of all present persons
- Accepting the state-approved articles of incorporation
- Holding director elections
- Adopting corporate bylaws
- Holding officer elections
- Voting to accept the corporate seal
- Voting to accept stock certificates
- Adopting the corporation's banking resolution
- Adopting the corporation's accepting stock offers resolution
- Adopting the corporation's reimburse expenses resolution
- Adopting any other resolutions necessary for the corporation
LLC Organizational Meeting
Limited liability companies also hold organizational meetings, but their agendas will look different from a corporation's agenda. This meeting can also be called the LLC's first meeting and is seen as the most vital obligation of the company's advisor.
All LLC members, also called owners, should attend and participate in this meeting. The members of an LLC are like the stockholders of a corporation, but LLCs do not require the board of directors or officers that corporations do. Some LLCs may choose to elect a corporate status, or incorporate, and, in that case, they will need to adopt the corporate structure.
Once an LLC's organizational meeting is completed, the company can begin conducting business.
There are several important tasks that should be taken care of during an LLC's first meeting, including:
- Organization of management
- Accepting of the operating agreement
- Outlining of capital contributions and ownership percentages
- Formalizing of the hiring of a business accountant and attorney
LLCs can be member-managed or manager-managed. There are pros and cons to each management structure, so this should be discussed and decided at the first meeting.
An LLC's operating agreement lays out all of the crucial information regarding the business's inner-workings. Member rights and responsibilities (both financial and managerial) should be clearly explained. The date of formation, as well as the intentions of the LLC, should also be clearly stated.
Agenda for an LLC Organization Meeting
The organizational meeting for most limited liability companies will follow this basic outline.
First, the LLC's advisor will begin the meeting by calling to order. The members will decide on a head manager for the business. Once this person is decided on, they will take over the meeting and conduct the election of any other officers the LLC chooses to have.
Next, the articles of organization and operating agreement should be presented and approved by the members. Every member must sign the operating agreement. This is a great way to ensure that everyone is on the same page and help prevent future disputes.
Then, the members will need to make sure that any necessary state and federal filings are complete. Certain LLC types will require specific licensure. All required licenses must be obtained before starting the business operations.
One member should be chosen to handle all taxation issues. This streamlines the process and helps to avoid any miscommunication and consequential missed tax deadlines.
Before ending the meeting, all member capital contributions should be collected and documented. Any member salaries to be paid should also be documented in the organizational meeting minutes. If any members are offering personal assets to be used by the LLC, the terms and conditions of this agreement should be spelled out in the meeting minutes.
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