What’s A Minute Book?
A minute book refers to the book kept by a limited liability company, corporation, or partnership that contains records of the business entity’s actions. It consists of the business’s articles/certificate, bylaws (if any), operating agreement (if any), minutes, or written actions in lieu of meeting minutes. It also usually contains tax (such as letter assigning the employer identification number) and agency documents (such as Workers Safety and Insurance or Job Service North Dakota applications) relating to the business.
Why Do I Need A Minute Book?
For a couple of reasons.
The first reason is to limit liability. Business entities like limited liability companies, corporations, and limited partnerships offer limitation of liability. This limitation doesn’t come automatically, though. Potential plaintiffs may try and pierce the corporate veil in order to reach an owner’s assets. One of the factors that courts consider in whether to pierce is if the business “failed to observe corporate formalities.” Recording minutes and recording them in a minute book is one of those corporate formalities.
The second reason is to limit disagreement. If you own your business with another person, you will need to make decisions. Memorializing those decisions leads to less disagreement. At worst, you are preventing a co-owner from acting in bad faith. At best, you are preventing a co-owner acting in good faith from misremembering the substance of those decisions.
What Decisions Go Into A Minute Book?
It depends, and you’ll want to get guidance from your attorney. Every business should memorialize major decisions, though. Here’s a partial list of those major decisions that are often memorialized in a minute book:
Change in ownership.
New or refinanced debt.
Change in taxation.
Acquisition of real estate.
Acquisition of personal property.
Significant contracts executed.
Change in management.
Change in management compensation.
Change in key employees.
Change in employee compensation systems or benefits.
Change in bank/credit union.
Any known liability or potential liability.
Change in operations.
How Does My Business Start Keeping Minutes?
Contact us or another attorney. It’s not a difficult process, but it’s good to get guidance on it. We’ll review what you have, and let you know our recommendations. We offer a couple of different ways to assist with minute books. First, we can do it for you. Second, we can teach you how to do it and consult when you have questions.