As you formulate your corporate plans and professional goals in 2025, Aloia Law would like to take a moment to recommend that you add a corporate record audit and assessment to your to-do list.
One of the most common complications we address in our business law practice here at Aloia Law is the need for accurate and up-to-date record-keeping. Operational and income-producing matters often result in governance matters being shifted aside. That movement can prevent crucial records from being available when impactful business opportunities present themselves or when your organization is faced with litigation.
Shareholder or membership disputes often get messy because there are no bylaws, operating agreement or buy-sell agreement in place to guide the parties when a dispute arises. Influential parties such as the IRS, banks, investors, and potential buyers are quick to request a review of corporate records to verify the legitimacy of past transactions and future plans. Corporate records are routinely requested in litigation and should also be available for review by shareholders or members. Failing to maintain quality record-keeping practices on an ongoing basis can result in higher costs to create them in a hurry later.
To assist you in identifying matters that may require your attention, we have created the following summary identifying the types of records that each of the three primary entity types should maintain on a regular basis:
Limited Liability Companies
NECESSARY:
- Articles of Organization
- Operating Agreement
- FEIN
- Annual Reports for every year of operation
- IRS Form 2553 (S-corp election for taxation), as applicable
RECOMMENDED:
- Additional Articles of Organization such as indemnity provisions for managers and members and limits on liability of the same
- Buy/Sell Agreement
- Membership Interest Register
- Consent Resolutions
- Company Record Book
Corporations
NECESSARY:
- Articles of Incorporation
- Bylaws
- FEIN
- Annual Reports for every year of operation
- IRS Form 2553, as applicable
- Initial, Annual, and Special Meeting Minutes and Consent Resolutions
- Corporate Record Book
RECOMMENDED:
- Additional Articles of Incorporation such as indemnity provisions for Directors and Officers and limits on liability of the same
- Buy/Sell Agreement
- Stock ledger (either certificated or uncertificated)
Nonprofit Corporations
NECESSARY:
- Articles of Incorporation
- Bylaws (if tax-exempt, must include charitable purpose, conflict of interest, and dissolution distribution provisions)
- FEIN
- Annual Report for every year of operations
- Initial, Annual, and Special Meeting Minutes and Consent Resolutions
- Corporate Record Book
RECOMMENDED:
- Additional Articles of Incorporation such as indemnity provisions for Directors and Officers and limits on liability of the same
- Tax Exempt Application
In addition to the governance documents listed above, it will be useful for most entities to also have a standard form template of the following agreements:
- Non-Disclosure and Confidentiality Agreement
- Employment Agreement and/or Restrictive Covenant Agreement
- Independent Contractor Agreement
- Sales Contract/Purchase Order/Vendor Agreement
- Trademark registration(s) for goods/services identifiers
- Employee Handbook (if the entity has employees)
If you would like to undertake an audit of your company’s records or would like assistance in preparing any of the documents listed above, we would be happy to help. Questions and inquiries can be directed to Ben Aloia ([email protected]), Tim Orlando ([email protected]) or Kathryn Spray ([email protected]), or you may call our office at (586) 783-3300.