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Each time the corporation holds an annual meeting or any special conferences, the secretary should keep minutes of the meeting discussions. The minutes may be simple, but should specify the following:

  • Voting results for each resolution
  • Written consents before or soon after the approved actions

If the corporation does not keep updated minutes, the IRS may look at discrepancies between the corporate resolutions adopted by the board of directors (and shareholders, if applicable) and the actions of the corporation. It may also reclassify expense reimbursement as dividends and insider loans as additional capital. Both will result in additional taxes and penalties, because the reclassification moves certain things to "income."

During lawsuits, the plaintiff's attorneys can ask for corporate meeting minutes as part of the discovery process. If the minutes are not updated, it can be inferred that the officers and shareholders acted without authorization of a corporate resolution. It may also "pierce the corporate veil", allowing the winner of a lawsuit access to personal assets of the officers and shareholders.

 

Please note: This page offers general legal information, not but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.


Written and Reviewed by Experts
Written and Reviewed by Experts
This article was created, edited and reviewed by trained editorial staff who specialize in translating complex legal topics into plain language.

At Rocket Lawyer, we believe legal information should be both reliable and easy to understand—so you don't need a law degree to feel informed. We follow a rigorous editorial policy to ensure every article is helpful, clear, and as accurate and up-to-date as possible.

About this page:

  • This article was written and reviewed by Rocket Lawyer editorial staff
  • This article was last reviewed or updated on Nov 20, 2023

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