What are corporate formalities?
To continue recognition as a corporation or LLC, the corporation/LLC is required to abide by certain “corporate formalities” and to keep accurate records of its activities. There are three distinct corporate formality requirements: Corporate Records Requirement, the Annual Reporting Requirement, and the Meeting Requirement. Corporate Records Requirement: The corporate records requirement compels Corporations and LLCs to maintain certain corporate records at its principal office. These records include the Articles of Incorporation, the Corporate Bylaws (Operating Agreement), Minutes of shareholder and director meetings, written communications b/t shareholders and the corporation for the past three years, the corporations stock transfer ledger, names and address of shareholders, directors and officers, most recent annual report, and financial records for the past three years. Annual Reporting Requirement: Corporations and LLCs must file a statement and pay a moderate fee on an annual or
In order to maintain the limited liability protection afforded corporate entities certain minimum formalities must be met. These include filing statements and paying annual fees, maintaining a resident or registered agent and keeping corporate minutes. Failure to follow these formalities can result in personal liability to officers, directors and shareholders.
In order for a State to continue to officially recognize an LLC after Organization, States require that companies maintain certain records and file reports with the State. One of the advantages of an LLC is that these requirements are generally simple. My-LLC.biz makes complying with these State requirements easy with our Customized Start-Up Check List and Document Library. Corporate Records Requirement: States generally requires an LLC to maintain certain past and present corporate records at its principal office. Such records may include the current Articles of Organization, Operating Agreement, minutes of Member or Manager meetings, the names and addresses of current shareholders and officers, the most recent annual report and the financial records from the last three years. Annual Reporting Requirement: Most states require that LLCs file a statement and pay a moderate fee on an annual or biennial basis. This filing requirement, which is generally referred to as an Annual Report or
In order for the business to continue as an officially recognized corporation or LLC after incorporation, states require that companies follow certain “corporate formalities” and keep accurate records of their activities. There are basically three prongs of the corporate formality requirement: the corporate records requirement, the annual reporting requirement, and the meeting requirement.
(back to top) In order for the business to continue as an officially recognized corporation or LLC after incorporation, states require that companies follow certain corporate formalities and keep accurate records of their activities. There are basically three prongs of the corporate formality requirement: the corporate records requirement, the annual reporting requirement, and the meeting requirement.
