Many owners of corporations run into the situation where they have not recorded changes in who their directors are, who their officers are, and sometimes even who their shareholders are. This is understandable—people get busy growing their businesses, running their businesses, managing their businesses… However, if these things have not been taken care of, then you probably need your corporate records to be cleaned up.
Here are 3 reasons why you should keep your corporation’s records up-to-date—and how it will establish a nice foundation for you moving forward.
1: It’s required by law.
The requirements vary from one governing jurisdiction to another, but for the most part, they all have rules and regulations regarding how and when the records need to be updated. For example, if a Federal corporation has a change in officers, a directors meeting or resolution should be passed to approve of the officer change, and a record of that meeting/resolution should be stored in the company’s Minute Book, and the Officers Register should be properly updated.
2: You hope to eventually sell your company.
Many people plan on (or unexpectedly need to) sell their company. Potential buyers are going to want to know how the corporation is structured, and see certain records relating to the company before committing to buying. If these records aren’t organized or available, it may put off a potential buyer and take longer than necessary to sell your company.
3: Your company gets audited.
If your company is audited, the auditor will want to see all of the corporate records. If your records aren’t organized, you will need to put in a lot of time and effort (and possibly money) in order to organize them.
Maintaining your corporate records annually is a lot easier than scrambling to do a big “clean-up” years down the road. We’re here to make annual maintenance easier for business owners and non-profit leaders alike. Contact us today if you would like help with yours.
