The Importance of Maintaining Good Corporate Records

There are many situations when a business will need to prove its books and records are in proper order.  These include government agency audits, inspections and investigations; financing transactions such as loan, grants and investors; and corporate due diligence involved with mergers, separations, sales and joint ventures.

Here is a list of documents you should keep in one location (usually at your place of business) for access on demand by various agency officials:

  • Certificate/Articles of Incorporation or Organization and filing receipts (certified copy as filed with the relevant Secretary of State), including all filed amendments
  • Bylaws and all amendments
  • “Foreign” Filings (registrations to do business in states other than the state of incorporation)
  • Organizational consents and organizational meeting minutes by the incorporator and initial stockholders and directors that, among other things, appoint initial Board members, adopt the Bylaws, appoint initial officers and authorize any other actions that require formal approval such as issuance of shares to founders
  • Founder Vesting Agreement, voting agreements, shareholder agreements, operating agreements, and any other agreements among owners, voters or key employees
  • Copies of minutes from all Board meetings and stockholder (member) meetings
  • Copies of all Board and stockholder resolutions, adopted either at meetings or by written consents
  • Stock Ledger and Option Ledger listing status and ownership of all shares and options
  • Copies of all issued stock certificates (member unit certificates)
  • IP Assignments (trademark, copyright and patent)
  • Evidence of IP filings/registrations (for any trademarks, copyrights, patents and domain names)
  • All contracts, leases and amendments, including NDAs, non-compete agreements, employment agreements and contractor agreements (fully signed and complete copies)
  • Option or equity incentive grant documentation (including Board approvals)
  • Financial statements, tax records and documents related to value of the company
  • Annual or biennial reports or statements of information filed with the state and any other government agency
  • Appraisals of stock value or key asset/property values
  • Deeds or title documents to important business assets
  • Permits and licenses for operating

What to Do When Your Start Up Venture Fails

When you start a business, you put so much time, money and hard work into making it a success.  Sometimes, however, tough decisions have to be made when revenues are below what is needed to sustain the business.  How do you close a business entity such as a corporation or limited liability company?  Here is your five step action plan:

  1. Shareholder/Member vote to dissolve the business and record the meeting and vote in the company’s official minutes.
  2. Obtain tax clearance from the New York state tax department and its consent to the dissolution.
  3. Prepare and file a Certificate of Dissolution with the State Department of Corporations.
  4. Wind up the business’ final affairs, including giving notice to creditors.
  5. Distribute remaining assets and funds to investors and equity owners.