The Importance of Keeping Accurate Corporate Records

Once you have decided on the appropriate business entity to form and filed the proper formation documents, our dedicated team of legal professionals is prepared to oversee all of your business needs and can provide counsel to help maintain accurate corporate records and mitigate business risk. Whether you are forming a limited liability company (LLC), limited partnership (LP), or corporation, maintaining accurate corporate records is an essential aspect of business operations. 

 

Forming your entity is an exciting milestone. Every successful business is tasked with such essential responsibilities as filing required documents on time and addressing a host of legal issues. 

 

 

Corporate Counsel, Records & Governance

 

Many companies establish a governance function by preparing foundational documents that are placed in a binder somewhere for safekeeping. Once that first step and those initial formation documents are completed and filed done, these corporate records can become stale over time if not regularly maintained by a corporate secretary or an assigned member of the organization. 

 

Just as it is necessary to have current financial documents, it is important to keep accurate corporate governance records and minutes from relevant corporate meetings. While this is a necessary function, often corporate governance does not receive the requisite attention required. Maintaining this function is essential for the future of your business and its growth. For example, if your company is considering an acquisition or similar complex business transaction, you will need to produce corporate records which requires that you maintain accurate, updated governance documents which add to your firm’s business credibility. 

 

Our team at Jacko Law Group, PC (“JLG”) offers comprehensive general corporate counsel solutions, specifically for maintaining governance and corporate records in the following areas:

 

  • Completing required annual updates. Most states (including CA) require that an annual meeting of shareholders and the board of directors be held each year to not only reflect the election of officers and board members, but also memorialize any material changes to the business. 

 

  • Amending bylaws and agreements to reflect changes in the business. Companies are changing their methods of operation more frequently than before to adapt to rapidly evolving business conditions. As your firm evolves, your agreements are likely to require amendment. 

 

  • Forming a new business entity. Whether converting from a sole proprietorship to an LLC or developing a brand-new entity, JLG can help do the following: 

 

  • Submit Articles of Organization/Incorporation – To form a limited liability company (LLC), you must file Articles of Organization (Form LLC-1) with the California Secretary of State. 
  • Similarly, to form a corporation, you must file Articles of Incorporation with the Secretary of State’s office. Obtain Employer Tax Identification Number (EIN) – Registering your EIN is an important step and required for tax administration.

 

  • Drafting organizational documents and agreements. The type of business entity you choose to form dictates the organizational documents needed. 
    • LLCs require operating agreements to memorialize membership interests, services and voting rights; are critical for good governance of LLCs with more than one member; and generally, are updated only as material changes occur in the business. 
    • Corporations are more complex, requiring bylaws, meeting minutes, shareholder agreements and more depending upon the structure of your business. Corporate records are required to be updated annually, and sometimes more frequently. 
    • Partnerships are governed by partnership agreements that memorialize partnership interests, rights and protections, including partner responsibilities, entitlement to distributions and limit liability. 

 

  • Submitting statements of information. All California corporations and LLCs must file a Statement of Information with the California Secretary of State. Designate Agent of Service of Process. If needed, JLG can serve as your Agent of Service of Process in California. 

 

  • Completing blue sky and other required filings. If your company sells securities, your firm must comply with federal regulations and the state laws where the securities are offered and sold. JLG will complete required filings on your behalf, including necessary exemption filings, if applicable.

 

JLG has experienced legal professionals with specialized knowledge who can review your corporate records to mitigate business risk. As always, please let us know how we can best support your needs. Contact our JLG team today at (619) 298-2880 or visit us online to schedule a consultation.

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