Newsletter September '10 - Small Business Corporate Compliance

Small Business Corporate Compliance

As a business lawyer, I am often asked if – and what – an owner of a small business corporation should be doing from a corporate compliance perspective. My response is that all corporations – no matter the size – should adhere to the formalities imposed by the Florida Business Corporation Act and the Bylaws. One important step is for the corporation to conduct annual shareholder and director meetings. The most common order of business at such meetings is to elect directors and officers. Additionally, there may be important actions that need to be ratified from the prior year or authorized for the current year, such as shareholder dividends and distributions, stock issuances, etc.
It is important to hold annual meetings as part of a program of corporate compliance because the failure to follow these formalities may possibly allow a creditor to pierce the liability protection of the corporation and directly reach the assets of the shareholders. The annual meetings can be held in person and documented by meeting minutes, or can simply be documented by a written consent (instead of holding an in-person meeting). It is advisable to provide a similar level of adherence to formalities established with respect to a limited liability company, whether by statute or the company’s operating agreement.
If you have any questions about annual meetings or corporate compliance issues, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.

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