Free Corporate Minutes

For the protection of persons who have taken action on behalf of the corporation, it is not unusual for the directors and/or stockholders to approve these past actions on an annual basis. The "Approval of Actions" section of this document includes an "all actions subsequent to the last meeting" option which provides such general approval. Other important actions can be mentioned specifically, such as officer compensation, transactions with related parties, and purchases of significant assets.

The "Financial Statement" section provides for the acceptance and approval of the corporation's financial statements.

Other sections of this document provide for the authorization of future actions to be taken at a future date.

Generally, corporate action is taken by a simple majority of the directors present at a directors' meeting, or shareholders present (or represented by proxy) at a shareholders' meeting who own a majority of the corporation's outstanding stock. However, the directors and/or shareholders are permitted to set a higher or lower approval requirement. For example, it is not unusual for the bylaws to include a provision that requires a two-thirds approval in order to amend the bylaws. In some cases, a higher approval may be required for ALL director and/or shareholder actions, not just certain types of actions. The incorporation documents, including the bylaws, should be reviewed to determine whether there are such requirements.

The interview provides a variety of opportunities to document authorization for specific types of corporate action that will occur in the future. For example, the "Authorization of Action" section provides options that authorize lease arrangements and the establishment of insurance and pension plans.

Other optional sections regarding the following items allow for authorization of various actions that involve the payment of corporate funds:

Salaries

Bonuses

Directors' fees

Contributions to profit-sharing plans

Dividends

The process of obtaining a loan from a lending institution (for example, a bank) may include a requirement that the board of directors and/or the shareholders authorize the loan transaction. This authorization is provided in the form of a "borrowing resolution" and shows that the officers of the corporation are authorized to sign the loan documents.

In addition, when a bank account is opened, a "banking resolution" may be required to establish the identities of the officers or employees who are authorized to sign checks on behalf of the corporation.

There may be actions taken by the directors and/or shareholders that are unique or unusual. A "free-form" section in this program allows the user to include such actions.

A corporation takes official action through its board of directors and/or its shareholders. The shareholders are the owners of the corporation and elect the directors, who are responsible for general management of corporation and may elect officers to carry out their instructions. Directors have a fiduciary duty to the corporation to act in the corporation's best interest, among other legal duties, including protecting the shareholders' investments in the corporation. The shareholders and directors formalize their official corporate actions by making a written record. The record of the corporate action is usually written in the form of "minutes," if the board and/or shareholders meet formally, or in the form of a "corporate action by unanimous consent," if an action is taken without a meeting.

This Corporate Minutes document is intended primarily for use by small for-profit or non-profit corporations. The interview allows you to choose from typical resolutions and provisions used by small corporations and provides appropriate explanations. You may include unique provisions for special circumstances.

Corporate laws in most states offer considerable flexibility in requiring when certain actions MUST be taken by shareholders, or MAY be taken by directors. Such requirements, if any, will generally be found in the corporation's incorporation documents. Incorporation documents generally include the corporation's "articles of incorporation" (sometimes referred to as the "charter") and the bylaws. You should refer to those documents to help you answer questions regarding whether a specific corporate resolution should be adopted by the shareholders or the directors.

Meeting Minutes and the Protection of Assets
Benefits of Keeping Corporate Records
Maintaining Corporate Records
How Long to Keep Corporate Records
Organize and Conduct Corporate Meetings

In the corporate context, the term "proxy" has two meanings. First, it refers to a person who is given the authority to represent, vote and exercise the powers associated with the stock owned by the person who designates the proxy (the "Stockholder"). Second, the term "proxy" also refers to the document under which the stockholder gives the power to the person who will represent the stockholder. Thus, a proxy document is actually a special power of attorney. In many cases, the proxy is given to another stockholder.

Generally, a designation of proxy is given for one stockholders meeting, and the Proxy is given full power to vote the shares in the Proxy's discretion or in accordance with an informal oral arrangement between the Stockholder and the Proxy. However, the Stockholder may wish to require the Proxy to vote a certain way on one or more specific issues. For example, if directors will be elected at an annual stockholders meeting, the Stockholder may wish to require the Proxy to vote for certain directors. Or, there may be a key issue that will be decided, and the Stockholder wants to make sure that the Proxy votes "for" or "against" as the case may be.

This program's proxy document is designed to allow the Proxy full discretion to vote on all issues, although the Proxy may be required to vote "for" or "against" on specific issues. Unless the Proxy can vote on all issues properly raised at the meeting, the Stockholder's shares (as represented by the Proxy) could be challenged as "not being present" for quorum purposes.

Generally, a designation of proxy is given to the Proxy with respect to just one stockholders meeting. Usually the reason for the proxy is because the stockholder does not plan to attend the meeting in person, but wants to make sure that his or her shares are voted at the meeting.

Sometimes, other shareholders actually solicit proxies from other shareholders. The reason may be that the soliciting stockholder wants to control more votes, or it may simply be that if not enough stockholders are present at the meeting (in person or by proxy), the stockholders will be unable to conduct business at the meeting because of a failure to meet the corporation's quorum requirement.

The program allows the Stockholder to give a proxy for an unspecified period of time, but generally this is not done. If a Stockholder desires to give another person voting power for an extended period of time, it is recommended that a lawyer be consulted regarding the possibility of creating a voting trust, a document not offered by this program.

It is common for the minutes of a corporate meeting to identify the person who chaired the meeting, as well as the person who recorded the minutes. The bylaws may specify the persons who should fulfill these roles. For example, the bylaws may specify that the president will chair directors' and shareholders' meetings and that the secretary will record the minutes.

Generally, the directors are elected in accordance with the bylaws. The election is usually held on an annual basis. In some cases, all directors are elected each year. In other cases, they are elected on a "staggered" basis. For example, a corporation with 5 directors might have a bylaws provision that provides for 2-year directors' terms with 2 directors elected every other year and 3 directors elected in the alternate years.

Officers also are elected in accordance with the bylaws, and are usually elected by the directors.

If stock will be sold or "issued," the approval of the shareholders should be obtained. The issuance of stock may be subject to "preemptive" rights which entitle current shareholders to acquire a percentage of the new stock so that their individual percentages of ownership in the corporation are not reduced or diluted by the new issuance.

If the corporation has more than one class of stock, the approval of all classes of stock is generally required. You should refer to your incorporation documents and/or obtain the opinion of legal counsel.

Although not mandatory, it may be desirable to specify the time and location of the next meeting. This provision is more likely to be used in connection with "minutes" for a regular meeting of the board of directors. It is less likely to be used in connection with annual or special meetings of the shareholders for a for-profit corporation, or with the preparation of "unanimous consent" documents.

Generally, if corporate action will be taken at a meeting, the shareholders and/or directors are entitled to formal notice of the time, date, and place of the meeting. There are two exceptions. First, in the case of a "regular" meeting of the board of directors, notice may not be required if the time, date, and place of the meeting were provided at the last meeting, or if the bylaws specify that notice of such meetings is not required. Second, the directors and/or shareholders may "waive" the notice requirement by signing a short document, a "waiver," consenting to the lack of notice for a particular meeting.

A Waiver of Notice document can be used to generate waivers for the directors and/or shareholders to sign in order to waive the notice requirement. A copy of the waiver can then be attached to the minutes as evidence that notice was waived.

A "proxy" is an agreement (usually written) that permits an agent or a substitute to represent a shareholder at a shareholders' meeting. In the above example, official action could be taken at a shareholders' meeting without Alice, if Alice signed a written agreement that designated someone else (perhaps one of the other shareholders) to represent her at the meeting, and if the person she designated was present at the meeting (with a copy of the written agreement or other proof of the proxy arrangement).

A corporation cannot take action legally, unless a "quorum" is present. For a non-profit corporation, the "quorum" is the minimum number of directors who must be present at a board of directors' meeting. For a for-profit corporation, the "quorum" is the (a) directors who must be present at a directors' meeting; or (b) shares of stock that must be represented by shareholders at a shareholders' meeting in order to conduct business or take action. For example, if a corporation has 9 directors, and if the bylaws provide that a majority of the directors constitutes a quorum, then 5 directors must be present at the meeting in order to take official action.

If the meeting is a for-profit corporation's shareholders' meeting, satisfying the quorum requirement requires a review of the number of shares represented by the shareholders. It is not simply a matter of determining how many shareholders are present. The following example provides an illustration. Assume that a corporation has 4 stockholders who own stock as follows: Alice 35, Bob 30, Cathy 20, and Don 15. Assume further that there is a 60% quorum requirement. In this situation, the quorum requirement is met if just Alice and Bob are present, because they own a combined total of 65% of the shares of stock. However, if Alice is not present, all three of the remaining shareholder would need to be present in order to have a sufficient amount of stock represented at the meeting.

It is not unusual for officers or corporate employees to present reports at directors' and/or shareholders' meetings that explain certain corporate matters, but do not require formal action. For example, the corporate treasurer may report on the status of a borrowing request that has been submitted to a lender, or a marketing person may report on quarterly sales.

1. The Minutes should be signed by the corporate secretary or another person who is authorized to take minutes and/or record official corporate action. There is no requirement that the signature be witnessed or notarized.

2. To verify compliance with state corporate laws, it is recommended that a lawyer review the Minutes upon completion. This step can become especially important if it is a for-profit corporation with more than one class of stock or if it is involved in unusual transactions. The attorneys in the Rocket Lawyer network can help you answer any questions you have. After you finish your document, open it in the Document Manager and click the Legal Review icon just above the preview of your document.