As we move into the 3rd quarter, now is a good time to ensure that your corporation has conducted its annual shareholder and director meetings. For many this involves merely election of directors and officers, but often there are important actions that need to be ratified from the prior year or authorized for the current year, such as shareholder dividends and distributions, issuance of stock, etc. It is important to hold annual meetings as part of a program of corporate compliance. Specifically, systemic failure to follow the formalities imposed by the Florida Business Corporation Act and the Bylaws of a corporation may subject the liability protection of the corporation (the “corporate veil”) to attack.
It is advisable to provide a similar level of deference to any formalities established with respect to a limited liability company, whether by statute or the company’s operating agreement.
The annual meetings can be held in person and documented by meeting minutes, or can simply be documented by a written consent in lieu of meeting. If you have any questions about annual meetings or corporate compliance issues, contact a Florida business law attorney.