Many who organize small businesses, such as corporations or limited liability companies, assume that the benefits of such entities are absolute. One of these benefits is the complete separation of the business from an business owner’s personal net worth. However, these benefits are not maintenance-free. Once your company is formed, it is easy to go back to business as usual and forget to comply with necessary formalities, such as preparing detailed company minutes and resolutions. When properly kept, minutes constitute a record of company proceedings and should be regularly prepared for the following reasons: (i) reducing exposure to personal liability, (ii) proving authorization of major business decisions, and (iii) preserving a credible record for audits.
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