Meeting minutes are more than just formalities—they are key to keeping your LLC or corporation legally sound and operationally transparent. This guide offers straightforward advice on crafting these documents efficiently and accurately to uphold legal standards and foster sound corporate governance.
Why Meeting Minutes Matter in Corporate Governance
Meeting minutes are pivotal for several reasons in a business setting:
- Legal Compliance and Protection: They maintain the corporate veil, which legally distinguishes the business from its owners, safeguarding personal assets against business debts.
- Accurate Record Keeping: Minutes chronicle the decisions and actions of a company’s leadership, serving as a dependable reference for future decisions and strategic planning.
- Regulatory Obligations: Keeping accurate records like meeting minutes is often mandatory to show compliance with corporate regulations.
How to Write Effective Meeting Minutes: A Step-by-Step Guide
Here’s how to create meeting minutes that are both compliant and practical:
- Header Information:
- Company and Meeting Details: State the full name of the company, the type of meeting (e.g., Board of Directors, General Members), and the date. You might also include the time and place for extra context.
- Body of the Minutes:
- Discussion Summary: Summarize the discussions clearly, highlighting key points and decisions. Aim for concise yet comprehensive descriptions to make the minutes useful for future reference.
- Decisions and Resolutions: Outline any resolutions adopted or actions approved, noting who is responsible for implementation.
- Attendance and Signatures:
- Record of Attendance: Document all attendees to validate the meeting and its outcomes.
- Authentication by Signature: Have the minutes signed by the appointed officer (typically the secretary or president) to formalize the document.
Leveraging AI to Streamline Meeting Minutes
Using technology can greatly enhance the efficiency of preparing meeting minutes. Here’s how AI tools like ChatGPT can help:
- Automate the Drafting Process: Feed the AI details like the meeting’s date, attendees, and key discussion points, and it can generate a draft of the meeting minutes.
- Customization and Review: Modify the AI-generated draft to ensure accuracy and completeness. This step confirms that the minutes capture all crucial elements of the meeting and meet company standards.
- Finalization and Storage: Once perfected, integrate the minutes into your company’s official records, making them accessible for audits or compliance reviews.
Conclusion
Consistently updated meeting minutes are crucial for sound corporate governance. They not only meet legal requirements but also provide a clear record of your business’s decisions. By following these steps and utilizing modern AI tools, you can streamline this task and dedicate more time to growing and managing your business.
Video Transcript
Introduction to Corporate Formalities and Meeting Minutes
Importance of Meeting Minutes
If you own an LLC or a company of some sort—maybe it is a corporation, maybe it is some other entity type—usually, you have to keep meeting minutes. That might be on an annual basis, maybe even quarterly. A lot of attorneys will tell you, “To avoid piercing the corporate veil, or piercing the limited liability shield in an LLC, you want to make sure that you follow corporate formalities.” That means keeping your personal bank account separate from your business bank account. Keep separate bookkeeping records. But also, as part of a corporate formality, it is recommended that you keep meeting minutes. So how do you do that without having to pay an attorney to draft these?
Creating Meeting Minutes: A Step-by-Step Guide
What to Include in Meeting Minutes
I would like to show you two quick and easy ways to do it. First, what do you put on meeting minutes? The name of the company, the name of the type of meeting, so, for example, that might be a shareholders’ meeting in a corporation a board of directors meeting for a corporation, or a board of governors meeting for an LLC. It also might be the members meeting for an LLC. Whatever kind of meeting it is, just put that on the top. So you have got the company name, the type of meeting it is, and the date. Ideally, the location and the time, but those are optional. And then you just say, “What did we do in the meeting?” Maybe you reviewed the financials. Maybe you made a decision. For example, you might have decided, “Let’s move from this bank to this bank,” or “Let’s not use this service or vendor anymore. Let’s use a different one.” Or maybe you decided, “You know what? I am not going to make any decisions today. I am going to continue to rely on those who are running the company.”
Simplifying Meeting Minutes for Solo Owners
You might say, “Wait a second. This all sounds like a big company.” What happens if you are the only owner? You are the only person that works in the company. You are the only member of the board of directors or board of governors. That is fine. It doesn’t matter. You still should have these on an annual basis, at least. And your name will go in all of those different titles or fields. So you still do these minutes, even though you might be the one saying, “You know what? I am going to just defer all these decisions to me as the president of the company, even though I as the owner am doing an annual meeting, reviewing things, but not making any significant changes.” So the actions at a meeting can be very minimal. They can be reviewing the business of the person who is running the company, which again might be you. That is why these are simple. They often just feel like a formality in a small business. And then once you have listed the actions at the end and you have made sure you listed who was in attendance at the meeting, at the bottom, typically it is signed and dated by whoever is the secretary or president of the company. That is about it. It is pretty straightforward, but let me show you another quicker way to do this. Of course, you could write it up yourself, but why do that? It is 2024. You can use AI. So right now, I am going to jump into ChatGPT, and let’s just say, “Hey, ChatGPT, I want you to draft the board of directors meeting minutes dated today.” And we will just put in here today April 3rd, 2024. My company’s name is ABC Inc. The company has one director, Jane Smith, who attended. We might also say Jane Smith is the only shareholder. Jane Smith is also the president.
Utilizing AI to Draft Meeting Minutes
AI-Generated Example
And then, what did we do? What kind of action? Well, we reviewed the business of the company and its financials. We also decided to switch banks from Wells Fargo to XYZ Bank. I am just making this all up. So, I submit all that. This is what I just sent to AI, and here is what it spits out back. ABC Inc. This is the head of it. Board of Directors Meeting Minutes. Date: April 3rd. In attendance, was Jane Smith, Director, Shareholder, and President. These are the different roles Jane has. Location: ChatGPT just filled in, “The principal office of Jane’s company name.” The meeting was called to order by Jane Smith, the sole director and president of the company.
Review and Approval
She confirmed that there was a quorum. You don’t have to have this in a business with one person who can attend, but it is a nice little formality that is typically done if there are multiple owners or multiple people who would attend a meeting. Then AI filled in here, “Jane Smith reviewed the current business operations and financial status of the company. Discussions focused on the performance of the company, highlighting key achievements and areas of improvement.” So that was one of the items we said that we did. The second item was we switched banks. “A significant point of discussion was the company’s banking relationships after reviewing the services, fees, and benefits offered by various financial institutions. Jane Smith made a unanimous decision to switch banking providers from Wells Fargo to XYZ Bank. The decision was based on the better financial terms and services that align with the company’s current needs and future growth plans.” You could shorten this up. You can modify it from here, but AI does a very nice job of putting together something that feels fairly reasonable.
And then it has an actual resolution here. “Resolved: The company will initiate the process of closing its accounts with Wells Fargo and transferring all financial operations to XYZ Bank necessary actions, including transferring all funds, updating all relevant financial and business documents, and notifying clients and vendors of the change in banking details.”
And then we have the end of these meeting minutes, a little closing: “With no further business to discuss, the meeting was adjourned by Jane Smith.” The minutes were prepared by Jane Smith. They were approved by Jane Smith as the director, and we have the date of approval. And then it says, “This document serves as a record of the proceedings of the board meeting held on April 3rd, 2024, for the company.”
Flexibility and Simplicity in Meeting Minutes
So you might say, “That is great,” but you also might say, “That is a lot of formality. I don’t need that.” Let’s just ask ChatGPT to try again. This time, make it as short as possible. So here we are going to see an abbreviated shortened or simplified version of all of this. You still have the name of the company, the date, and who attended. And then it says we reviewed the business operations and financials. We decided to switch banks. The meeting was adjourned. You might also have a signature on there, but in a small company, let’s face it, you don’t need something complex. If I were to draft minutes, I would probably do somewhere between the two of these. So you could either do that manually, or you could say, “Too short. Try again at medium length.” And here we will let ChatGPT prepare this as a little bit longer version. I kind of like that. I think it is enough. So here you would have all of this.
Conclusion
Recommendation and Final Thoughts
You could just cut and paste that right into a Google Doc or Microsoft Word document, print it out, and save it as a PDF. Just put it with your company articles of incorporation or organization bylaws, operating agreement, employee handbook, or any of those big legal documents that you keep together. You could put it with those. In general, I recommend that you do meeting minutes once per year at a minimum. You can do it quarterly. You might ask me, “Are there any cases where a person didn’t keep meeting minutes and because of that they lost their liability shield or somebody was able to pierce the corporate veil?” I have never seen a case where that alone was sufficient to pierce the corporate veil. In other words, I have never seen a case where the lack of meeting minutes all by itself was sufficient for a business owner to be solely liable for a business debt. However, I have seen several cases where the court said that was one of many factors that led the court to determine the owner should be liable for the debts of the business.
So I don’t think it is a decisive factor, but it certainly helps show a court if there is ever a dispute over this that you tried to treat your business as a separate legal entity. So you can either write up your meeting minutes yourself or you can use AI like ChatGPT, Bard, Claude, or one of the others that are out there. You should generally do meeting minutes as an owner of your LLC. So typically, you are called a member of the LLC. If you have an LLC, you also want to do meeting minutes for the governors of the LLC. And then, if you have a corporation, you will want to do meeting minutes for the shareholders’ meeting and meeting minutes for the board of directors meeting. So each business type has a meeting for the owners of the business and a meeting for those that are running the business. And in an LLC, we call them governors. In a corporation, we call them directors or board of directors.
I am Aaron Hall. I am an attorney for business owners and entrepreneurial companies. I provide these free educational videos to help you spot issues to discuss with your attorney. Help you save time drafting information like this, which you could run by your attorney. I always recommend you work with a local business attorney before you rely on any public educational information like you see here. And if you are interested in more free educational information, go to aaronhall.com/free. I have a checklist of common legal problems companies face and how to avoid them. And if you go there and enter your email address, I will also send you some free educational videos that help you identify those issues in your business and put together a plan for either avoiding them or resolving them if they already exist in your company.
I am Aaron Hall, an attorney for business owners and entrepreneurial companies.
