LEGAL FORMS - PAHRUMP

HERE IS HOW COMPANY PROTECTION WORKS !

Introduction

The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solutions and Yearly Updates have been carefully designed to simplify the procedures involved in running a small or medium sized company as a formal legal entity. These sets of customized documents contain all the essential building blocks of a comprehensive system for recording corporation, not-for-profit-corporation or limited liability company actions, yet can be adapted to meet the special circumstances of almost any corporation, not-for-profit-corporation or limited liability company.

Most small business people are primarily focused on doing what they do best: running their business. Marketers focus on marketing, service providers focus on providing service, widget-makers focus on making widgets, etc. Very few small Corporation, Not-For-Profit Corporation or Limited Liability Company owners spend much time at all preparing for a possible assault against their Corporation, Not-For-Profit Corporation or Limited Liability Company. The Corporation, Not-For-Profit Corporation or Limited Liability Company structures offers many advantages to the entrepreneur in a small or one-person enterprise. All of these advantages can be jeopardized, however, if you run the business as if the Entity did not exist.

If you do not acknowledge your Corporation, Not-For-Profit Corporation or Limited Liability Company, others won't either!

In this way, you will supply them with ammunition to attack your personal assets and the company's debts and obligations will become yours. And the company's default or failure can wipe you out financially.

None of this has to happen, and you can help prevent it simply by taking the time to make sure that what you do in your business is done by and on behalf of your Corporation, Not-For-Profit Corporation or Limited Liability Company ("Entity"). The best way to limit your own liability is to keep an ongoing record showing that your actions have been duly authorized and approved as actions of the Entity. To keep your Entity alive, you have to show that it is functioning as a legal entity in accordance with current Entity practices and the laws governing the official business of the corporation, not-for-profit-corporation or limited liability company.

You can use the documents and resolutions in theLegal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates to keep your corporation, not-for-profit-corporation or limited liability company alive. Each document has been carefully drawn up so that you can use it with little or no change in the wording and be sure of achieving the results you want.

NOTE: All documents in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates are complete and ready for your use except for a few forms requiring special wording for your corporation, not-for-profit-corporation or limited liability company (Bank Resolution, etc.). They can be used as is. Other special documents pertaining to your corporation, not-for-profit-corporation or limited liability company based upon the record keeping already in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates can be prepared by your Entity council or yourself using any normal word processor. Documents sent to Legal Forms - Pahrump for review may be done at no charge if the documents add to the sets of customized documents Legal Forms - Pahrump has to offer.

Most of the documents are to be kept with inter-Entity records, usually an "Entity book" . (A loose-leaf book will suffice.)

The Importance of Keeping Corporation, Not-For-Profit Corporation or Limited Liability Company Records

Time spent keeping business records is unproductive time. No business person has ever gotten rich because he or she kept tidy records. If corporation, not-for-profit-corporation or limited liability company records can’t help turn a profit, aren't they just a waste of time?

The answer is quite simple

1. Are you prepared to stand personally liable for all of the debts of the corporation, not-for-profit-corporation or limited liability company that you assumed would be its debts and not yours?

2. Are you prepared to sacrifice tax benefits you planned upon receiving when you formed your corporation, not-for-profit-corporation or limited liability company?

Corporation, not-for-profit-corporations or limited liability companies keep records for different purposes. Big companies with billions at stake spend millions on records that thousands of shareholders, customers, employees. bureaucrats, suppliers and others may want to see to make sure that the company hasn't done something wrong.

Shareholders or members of smaller corporations, not-for-profit-corporations or limited liability companies, on the other hand, are less concerned with record keeping as a source for other business people than they are with the need to demonstrate that the corporation, not-for-profit-corporation or limited liability company is a real, functioning entity that is responsible for its debts.

In those instances, and they are far from rare, where the individual loses planned-for tax benefits or is held liable for the corporation, not-for-profit-corporation or limited liability company's debts, it is never the fault of the "corporation, not-for-profit-corporation or limited liability company." Rather, the blame lies with Entity personnel, officers, managing members, directors and shareholders or members who do not maintain books and records proving that the corporation, not-for-profit-corporation or limited liability company had an existence separate and apart from its investors.

Courts have repeatedly and frequently imposed liability for a corporation, not-for-profit-corporation or limited liability company's debts on its principals, i.e., its directors or managing members, officers and/or shareholders or members. In these cases, the courts can use either of two doctrines:

1 . the alter ego doctrine, under which they hold that the corporation, not-for-profit-corporation or limited liability company is no more than the alter ego of its shareholders or members, and, as such, its liabilities should be their liabilities; or

2. the piercing-the-corporation, not-for-profit corporation or limited liability company-veil doctrine, under which the courts rule that the corporation, not-for-profit corporation or limited liability company is really a sham and that it would be perpetrating a fraud to recognize its existence as a separate entity. Under this doctrine, the courts look through the corporation, not-for-profit corporation or limited liability company "veil" to its shareholders or members and hold them liable for the company's debts.

There is a common pattern to the fact in all of these cases: records were not kept at either the director, managing member, or shareholder or member level. This means that if a payment gives the false appearance of being made for the benefit of a shareholder or member rather than the Entity , there is no record keeping that the payment was, in fact, made for a corporation, not-for-profit corporation or limited liability company purpose.

The downfall of the entrepreneur lacking proper Entity record keeping is that he or she can't prove that whatever was done, was done on behalf of the corporation, not-for-profit corporation or limited liability company and not for personal reasons. The very fact that the entrepreneur didn't keep records shows that he or she didn't respect the corporation, not-for-profit corporation or limited liability company's separate identity. And it hits where it hurts most-in his or her pocketbook as well as in the Entity 's cash drawer.

Using The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields

The purpose of the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates are to ensure that if you treat your Corporation, Not-For-Profit Corporation or Limited Liability Company as a separate entity, e.g., treat its assets as its own and not as your personal assets, you will not lose the advantages you sought when you formed the enterprise. The sections that follow put at your disposal a comprehensive yet easy-to-follow system for compiling a record of your Entity 's actions. Corporation, not-for-profit corporation or limited liability companies live only on paper, and The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates provide you with the papers an Entity needs to stay alive and functioning properly.

What does it take to keep an Entity alive? First, you must realize that a corporation, not-for-profit corporation or limited liability company consists of three groups of individuals: officers (managers), members, and employees, just as in any unincorporated business; a board of directors; and the shareholders, members, or owners. Of course, it is possible for one person to wear all three hats, as in a one-person Entity, but that just makes it more difficult and more important to establish and maintain a separate identity as the person switches from one role to another. The basic point is that two of these groups, the directors or managing members and the shareholders or the members and managers, exist only in corporations, not-for-profit corporations or limited liability companies. Their existence and actions differentiate the corporation, not-for-profit corporation or limited liability company from other forms of business.

What do shareholders or members and directors and managers do? The shareholders or members own the Entity, and this gives them the right to elect the directors or managers and to approve or reject extraordinary Entity actions. These actions might include a merger or a liquidation. Individually, the shareholders are practically powerless, because they are only entitled to exercise these rights as a group. This means they have to get together in a meeting and vote "yes" or "no" on a particular proposal. Technically, this is the extent of the shareholders' or members role in the Entity. They can hold meetings and vote to approve board proposals. Technically, the shareholders or members can't, in themselves, carry out a resolution unless they also happen to be the Entity's directors, members or officers or voting members. But they are then acting as directors or managing members or officers and not as shareholders or voting members.

If the shareholders or members can only hold meetings and pass resolutions, it follows that records of meetings and resolutions will help prove that the Entity is being run as a legitimate separate something. The same is true of the board of directors or board of members. The directors or managing members are essentially the elected representatives of the shareholders or members, and it is their obligation to watch over the Entity between meetings of shareholders and members. The directors or managing members report to the shareholders or members on what the company has done since the last meeting. Thus, the board of directors or board of members can do no more than the shareholders or members. They can hold meetings and pass resolutions. The biggest difference, perhaps, is that the board will probably hold more meetings and pass more resolutions than will the shareholders or members.

Written records of meetings and resolutions, especially in a format that meets legal standards for documentary evidence, can supply the proof you need that your corporation, not-for-profit corporation or limited liability company is alive and functioning as a separate legal entity.

The documents in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and theLegal Forms - Pahrump Annual Solution and Yearly Updates provide you with the basic building blocks of Entity life. By using these documents, you can create an Entity biography with records showing when, where and what events have occurred in the Entity's life. The Entity lives and speaks through its records; the documents in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates comprise a system for documenting the events in the life of your Entity.

The Three Tiers

of

Corporation, Not-For-Profit Corporation, Or Limited Liability Company Management

In Order to understand the significance of Entity record keeping, you should understand the mechanics of how a corporation, not-for-profit corporation or limited liability company works. An Corporation, Not-For-Profit Corporation or Limited Liability Company consists of three groups, or tiers, of management. The base tier consists of its shareholders or members, i.e., its owners. Shareholders or members do not play an activist role in Entity operations. In fact, they have but three major powers:

1. The right to elect directors or managing members.

2. The right to approve or reject major Entity actions proposed by the board of directors or managing members, e.g., an amendment of the Entity's charter or a proposed merger

3. The right to inspect Corporation, Not-For-Profit Corporation or Limited Liability Company books and records

A shareholder or member, or even all shareholders or members acting in unison, do not have the authority or power to act in the Entity's name. A shareholder or member, for example, does not have the authority to bind the Entity to a contract for the purchase of a pencil. Under the law, shareholders or members "control" the Entity by electing directors or managing members to manage the business and affairs of the enterprise. Directors and managing members, in turn, bear the responsibility for setting Entity policies, financial and otherwise, and for overseeing those who run the business on a day-to-day basis, i.e., the officers or managing members of the Entity.

An individual director or managing member's powers are not really different from those of the individual shareholder or member. A director or member, acting as such, does not have the authority to represent the Entity in any contractual dealings, regardless of how insignificant the contracts may be. As a board, however, the directors or members do have the authority to bind the Entity in contractual dealings. They may delegate the power to officers or managing members, but if they do, the officer or managing member can act only within the parameters set by the board. If he or she does not, the officer or managing member can be held personally liable on the contract.

In most corporation, not-for-profit corporation or limited liability companies, the board, in fact, does appoint officers or managing members, e.g., a president or chief managing member, vice president or assistant managing member, secretary and treasurer or bookkeeper. Officers or managing members run the day-to-day operations of the Entity, subject to the oversight of the directors or members. (In a one-person Entity, the sole shareholder or member may also serve as the Entity's sole director or member and Officer or managing member. Nevertheless, the procedures spelled out here should be followed by that individual just as if the Entity had several shareholders or members.)

The authority of all officers or managing members should be spelled out in the Entity's bylaws or operating agreement, the board resolution appointing each officer or managing member and any employment agreement between the company and the officers or managing members. Traditionally, the courts view officers and managing members as having various ranges of authority. The broadest form of authority is possessed by the Entity's general manager, president or chief managing member, who generally is deemed to have authority to bind the Entity in any ordinary business matter. More often than not, an Entity's president or chief managing member is its general manager, but if your company assigns the specific title of general manager to a person that individual will be viewed as having the authority to bind the company in ordinary matters.

Vice presidents or assistant managing members usually are not viewed as having any authority to represent the Entity by virtue of their titles. There is one notable exception: if an individual is named vice president or managing member of a specific department, e.g., vice president of sales or assistant managing member of sales, then that person ordinarily will be viewed as having authority to bind the Entity to ordinary matters involving that department. So, for example, a vice president of sales would ordinarily be viewed as having the authority to hire an employee for the sales department. Similarly, a district or regional manager can be viewed as having authority to represent the district or regional office in ordinary business matters. If your company has such an employee, it is imperative that you follow the guidelines set out above for figurehead presidents if you intend to limit the authority of the vice president of a department or a district or regional sales manager.

Entity secretaries and treasurers ordinarily are not viewed as having authority that ranges beyond the operations of their office, i.e., record keeping and financial administration.

In a real sense, the three tiers of individuals can be described as follows: the shareholders or members are the body of the Corporation, Not-For-Profit Corporation or Limited Liability Company, the directors or managing members are the body's brain and the officers or managing members are its arms, legs, eyes and ears.

Just as every rule has its exception, so do the general rules described above. A number of states, including Delaware, provide that a corporation may be managed by its shareholders: they can act in lieu of a board or officers. Although this does make the operation of the corporation somewhat easier for one or two-person businesses, i.e., where the same persons serve as the corporation's only shareholders, officers and directors, this option does not reduce in any meaningful manner the obligation to keep records. The shareholders of such corporations take on the duties, responsibilities and liabilities of directors. This, then, means that they must be able to support their actions in exactly the same way that directors and officers must support theirs. From a record keeping point of view, the same documents must be supplied. In practice, this means that the following rules apply:

1. If an action can be taken by the board alone, the documents must not reflect shareholder action.

2. If an action must be taken by both the board and shareholders, then only documents showing shareholder action must be prepared.

How Corporation, Not-For-Profit Corporation Or Limited Liability Company Actions Are Accomplished

There are five types of Entity actions which must be addressed:

1. The election of directors or managing members.

2. The appointment of officers or Limited Liability Company Personnel.

3. The setting of Entity policies

4. Ordinary business activities, e.g., purchases of ordinary goods, hiring of non-managerial employees

5. Extraordinary activities, e.g., hiring managerial employees, embarking on a proposed merger or changing the Corporation's Articles of Incorporation or Limited Liability Company Articles of Organization.

With corporations, for example, each of these five actions requires at least one meeting and proper record keeping; some require at least two meetings. Directors, for example, must be elected annually by shareholders. The election takes place at the annual shareholders' meeting. The meeting, in turn, requires written notice, and minutes must be taken of its proceedings.

With corporations, for example, officers must be appointed by the board at a properly held board meeting. Again, there must be notice of the meeting, and minutes of the meeting must be taken. The same procedure must be followed by the board when it sets or changes Entity policy. Ordinary business activities of the Entity are carried out by the Entity's officers in conformity with the guidelines set out in board meetings. Those guidelines must be made known to officers.

With corporations, for example, extraordinary matters require two meetings. First, there must be a meeting of the board at which the board decides to embark on the extraordinary matter. It does this by passing a resolution. (All board actions are authorized by a resolution, regardless of whether they are ordinary or extraordinary matters.) The shareholders must then be asked to vote on the extraordinary matter proposed by the board's resolution. Again, a shareholders' meeting, which may be the regular meeting or a special meeting called to consider the extraordinary matter, must be called by giving appropriate notice, and minutes of the meeting must be kept.

Careless record keeping can cause exposure to personal liability from outsiders. The IRS can pierce the veil of an improperly run Entity and deny it the tax benefits for which it was formed. Another big risk run by the carelessly operated Entity is the unexpected liability flowing from one owner to another. Without proper record keeping, one owner’s actions can adversely affect another owner without the affected owner having any legal recourse.

An added benefit of accurate record keeping, therefore, is that it ensures parties will do what they are supposed to do, thereby avoiding the kinds of misunderstandings among owners that often spell the death of a promising business.

The Record of Shareholders' or Members Meetings - The Book of Minutes

As individuals, shareholders or members are powerless. They can act officially only as a group. This means that they have to get together in a formal meeting before they can legally bind the Entity. There are some exceptions where the shareholders or members can consent in writing to a particular action without having to hold a meeting. These instances are rare, and they are usually listed in the articles of incorporation.

Certain rules and procedures have to be followed for a gathering of shareholders or members to qualify as an official shareholders or members' meeting.

1. Every shareholder has to be given proper written notice of the date, time and place of the meeting, who is calling the meeting and an agenda of matters that will be considered at the meeting. Virtually every state requires a shareholder to have at least ten days' written notice of a meeting. Some states, require that shareholders or members be given no more than 60 days' notice; others set the maximum notice at 50 days.

Notice requirements can be effectively sidestepped in smaller corporation, not-for-profit corporation or limited liability companies if each shareholder is willing to sign a waiver of notice at the shareholders or members' meeting. The waiver is then attached to the minutes of the meeting. The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates provide the user with a notice of shareholders’ meeting waiver.

Unscheduled or special meetings of shareholders also require written notice, although a signed waiver of notice can also be used at these meetings. For an unscheduled meeting to be legally convened, it is essential that the records show that proper notice was given, or that the shareholders signed a waiver of notice requirement. Further, the notice of a special meeting must contain a statement of the meeting's purpose.

Your articles of incorporation or bylaws will specify where and when a shareholders' or members' meeting can legally be held, and the book of minutes should show the date, time and place of each meeting. In this way, you can prove that the meeting complies with the legal requirements.

2. No business can be transacted at a shareholders' or members' meeting unless a quorum is present. Therefore, it is essential that the book of minutes show that a quorum of shareholders or members attended the meeting. The articles of incorporation, the bylaws, the articles of organization or the operating agreement will usually state the size of the quorum, in terms of either the number of shareholders or members or the number of shares that must be represented at the meeting. For example, a bylaw that "two-thirds of all shareholders shall constitute a quorum" applies to the number of shareholders and not to the number of shares they own. On the other hand, a bylaw that "a majority of the outstanding stock shall constitute a quorum" means that a certain number of shares of stock must be represented, regardless of whether the stock is owned by one person or by thousands of people. If there is no rule on a quorum, every state corporation, not-for-profit corporation or limited liability company law states that a majority of the outstanding shares entitled to vote constitutes a quorum. Under such statutes, treasury and preferred stock, for example, would not be entitled to vote and would not be counted in determining whether a quorum is present.

3. Every shareholders' or members' meeting must be presided over by a chairperson. It must also have a secretary to record what happened at the meeting. The bylaws will ordinarily designate these officials, such as by specifying that the president serve as chairperson and the secretary act as secretary. The minutes of each meeting should state who presided at the meeting and who acted as secretary.

4. One of the first items of business at every shareholders' or members' meeting is to read and approve the minutes of the previous meeting. Once the minutes are approved, they become the best evidence of what occurred at the previous meeting. They are the most nearly conclusive proof of what the Entity is authorized to do. That is why it is important to show that the minutes have been read and approved as accurate.

5. Parliamentary procedure governs the conduct of meetings. This means that each matter to be acted upon has to be properly introduced by a motion from a member of the group and seconded by another member of the group. Then, every voting member of the group has to be given a chance to vote on the proposal. A sufficient number of votes, usually a majority of the quorum, must be cast in favor of the proposal for it to become binding on the Entity. It is not generally necessary to identify the person making or seconding a motion, nor is it essential to record the exact tally of votes, as long as the outcome is clear to everyone. Language such as "Whereupon, on motion duly made, seconded and carried, it was resolved that..." will usually be enough for the minutes to indicate how the matter was handled at the meeting.

6. Each action taken at the meeting should be described in sufficient detail to eliminate ambiguity and disputes over exactly what was agreed upon at the meeting. This is perhaps the most important part of your record keeping chores. Most of the documents in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates are designed to provide a careful and accurate description of Entity actions by shareholders or members and directors. As noted earlier, about the only action these groups can legally take is to pass a resolution of one sort or another. However, it is the existence and functioning of the shareholders or members and directors that mark the difference between a Corporation, Not-For-Profit Corporation or Limited Liability Company and a proprietorship. The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates give you the generally accepted language for the most commonly used -resolutions in Corporation, Not-For-Profit Corporation or Limited Liability Company practice.

7. Every meeting that has a beginning should also have an end. The end of each meeting should be recorded in the minutes and followed by the signature of the chairperson and secretary of the meeting.

The system employed in the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates is to include shareholder resolutions for two types of actions:

1. Those for which the law requires shareholder approval, e.g., a proposed merger

2. Those for which it is considered better practice to obtain shareholder approval, e.g., the adoption of an employee benefit plan

With this record keeping system, therefore, you have all the pertinent documents you will ordinarily need to record the proper and lawful activities of your Entity's shareholders or members.

The Record of Directors Meetings

The Book of Minutes

Most of the rules and procedures that apply to shareholders' or members' meetings apply equally to meetings of the board of directors. The single most important difference is who is qualified to vote on a particular matter. With shareholders or members, voting is a cut-and-dried affair. If they own common stock, they have the right to vote on any matter that comes before the shareholders. Not so with directors. Directors who have an interest in a matter to be voted upon by the board of directors should not vote on the matter. If an interested director does vote, the matter can be voided by the Corporation, Not-For-Profit Corporation or Limited Liability Company or by the shareholders or members unless the interested director can demonstrate in court that the transaction was entirely fair to the Corporation, Not-For-Profit Corporation or Limited Liability Company.

Virtually every state statute provides that a director with a personal interest in the matter may be counted in determining whether a quorum exists, but two cautions should be observed:

1. The interested director should disclose all material information concerning his or her interest in the matter.

2. The interested director's vote should not be included in determining whether a majority of the board approves of the transaction in question.

Of course, the board still has the responsibility to act in the company's best interests. The board cannot put the interests of an individual, even a sole shareholder, above the interests of the company. It is the tension between these interests that characterizes the central dilemma of the close corporation.

In practical terms, this means that the Entity's records should show that the actions of the board treat the Entity fairly and that the board has good reasons for the actions it takes. Especially in matters concerning dividends, compensation, contracts and loans to officers and shareholders or members, it is critically important for the minutes to contain all the arguments, reports, statistics and other documents that can help establish a "reasonable basis" for the board's actions. With respect to loans, it should be noted that almost every state prohibits a Entity from lending money to a director or member if that person is not also employed by the Entity in some other capacity, e.g., president, vice president or department manager.

At the first board meeting, the board normally adopts a host of resolutions pertaining to how the company will conduct its business: what bylaws will be adopted, where the company's principal offices will be located, the form of the Entity seal and stock certificates and so on. If any of these resolutions were not adopted by formal resolution at your Entity's first meeting of the board, you should consider doing so at the next board meeting.

Normally, the regular board meeting is concerned only with electing officers for the ensuing year, setting their salaries and other compensation and declaring dividends. Other actions by the board will require the use of s special resolutions. The same considerations that apply to selecting shareholder resolutions apply to the selection and use of board resolutions.

One of the main reasons for keeping records of formal resolutions is that you will occasionally get requests from outside entities such as banks, insurance companies or state agencies for official copies of board or shareholder resolutions. Some will also require an affidavit to be completed by the secretary to certify that the resolution is a true copy of the resolution actually adopted. For this reason, at the end of each document is the text of a standard secretary's certificate. The document has space to imprint the Entity seal, as well as a notary's seal and signature.

Properly used, The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates provide you with a simple, easy-to use and legally sound records system for your corporation, not-for-profit corporation or limited liability company.

Standard Clauses

In order to provide you with as many documents as possible, three standard Clauses that appear in many documents will be set out in the following paragraphs.

Shareholders' or Members' Meetings

Most Entity charters provide for an annual meeting of shareholders or members. Generally, the main business at shareholders' or members' meetings is to elect a board of directors to serve for the ensuing year. It is also good practice for the shareholders or members to adopt a resolution ratifying all the acts taken by the board during the past year.

In addition, specific actions that require shareholder approval, such as an amendment to the articles of incorporation or a merger proposal, also may be taken at the annual meeting.

The procedure to be followed when calling a shareholders' or members' meeting is rather standardized throughout the United States. First, the board should adopt a resolution in which it states where and when the meeting is to be held. Next, the board should set a record date, which is the date upon which a person must be a shareholder if he or she is to have the right to vote. (Persons acquiring shares after the record date may not vote at the meeting unless they obtain a proxy from the person who sold the shares to them.) The board must then have a notice sent to shareholders or members. This notice must contain the time, date and place of the meeting, and it should list the known agenda for the meeting. (If a special meeting is to be held, the notice must state the purpose or purposes for which the meeting is being called.) Ample notice must be given; most states provide that at least ten days' notice, and not more than either 50 or 60 days' notice, is to be provided. Occasionally, either the corporation's articles of incorporation or bylaws will specify a time period within those parameters; in such cases, the notice provision in the Corporation, Not-For-Profit Corporation or Limited Liability Company document must be followed.

Should the board fail to send out a notice of the meeting, or should there be an emergency that does not allow for the satisfaction of the waiver of notice, the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Annual Solution and Yearly Updates provide a waiver of notice format.

A number of states provide that if a Corporation, Not-For-Profit Corporation or Limited Liability Company action requires a shareholder or member vote, e.g., an amendment of the articles of incorporation, the action may be taken without holding a shareholders' or members' meeting if (1) the corporation obtains a written consent to the action from the shareholders or members, and (2) the written consent sets out a statement of the action to which the shareholders or members have consented. Corporations can also use consents if there has been a breakdown or failure in the processes leading up to or taking place during a shareholders' or members' meeting, or if through an oversight a meeting was not called and shareholder or member approval is needed. Where the states differ is in the number of shareholders or members who must sign a consent in order for it to be effective. Delaware, for example, requires the signatures of only a majority of the shareholders entitled to vote on the action, i.e., enough so that if a meeting had been held, the action would have been approved. Other states require the consent to be signed by all shareholders entitled to vote on the matter.

Board of Directors' Meetings

The same considerations that apply to keeping minutes of shareholders' or members' meetings also apply to board meetings: The minutes record the time, place, attendance, agenda and actions taken by the board, together with all the reports, contracts and other documents relevant to the actions taken at the meeting.

At the very first meeting of directors or members, much of the procedure that the Corporation, Not-For-Profit Corporation or Limited Liability Company will follow is established. The bylaws, the Entity seal, stock or member certificates and record books are adopted, and the company's business is launched. The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields contain the standard litany of resolutions commonly adopted at the first board meeting. If your Entity is an existing one, you should still check these resolutions to make sure that your company hasn't overlooked a vital step.

Unlike shareholders' or members’ meetings, the procedure for calling a board meeting is not quite so formal. As a rule, the articles of incorporation or bylaws of most corporations contain a provision that states when board meetings are to be held; those provisions constitute notice to each director. If neither the articles of incorporation nor the bylaws contain such a provision, every director must be given reasonable notice of a board meeting. Failure to supply each director with reasonable notice will invalidate the meeting.

The Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Shields and the Legal Forms - Pahrump Corporate, Not-For-Profit Corporate or Limited Liability Company Annual Solution and Yearly Updates supply the format for notice of a regular meeting of the board of directors and a standard format for the minutes of the annual board meeting. The main business of the annual meeting is to declare a dividend, elect officers for the ensuing year and set the salary of each officer. If the board takes any additional action, a record of it should be added to the minutes of the meeting, in basically the same format used for the minutes of shareholders' or members' meetings.

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Disclaimer

All data contained on this web site is provided for education and guidance. It is not intended to address the exact situation of any specific individual or entity. Reliance on this data is exclusively at the user's own risk. The data is not intended to provide a comprehensive treatment of any particular subject. Accordingly, the data in this web site is not intended to constitute legal, investment, accounting, tax, or any type of professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

Every attempt has been made to ensure that the data contained in this web site is accurate at the time of compilation. However, neither Legal Forms - Pahrump nor any personnel nor staff member nor affiliation associated therewith is responsible for any errors or omissions, or for the results obtained from the use of this data. Inadvertent errors can occur, and applicable laws, rules, and regulations are subject to interpretation and often change.

This web site contains links to other sites over whom neither Legal Forms - Pahrump  nor any personnel nor staff member nor affiliation associated therewith has any control. Neither Legal Forms - Pahrump  nor any personnel nor staff member nor affiliation associated therewith, provides any warranty about the accuracy of data found on any of these servers.

Except where otherwise noted, the web site contents are � 1999 by Legal Forms - Pahrump   No part of this web site may be reproduced or transmitted in any form without written permission.

Contact Information

Presently, Legal Forms - Pahrump  only sells products and services within the United States. If you are in the United States, you can reach us with the following information.
Telephone: (775)727-1811 FAX: (775)727-0418
 
Legal Forms - Pahrump

41 North Highway 160

Pahrump, Nevada 89048

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Send E-Mail with questions or comments about this web site. Copyright � 1999.  Legal Forms - Pahrump - Last modified: December 28, 1999