Incorporation is an important process in starting a new business. Still, business formation doesn’t end simply when the initial shares are sold to stockholders and the entity is legally established. It’s important to properly document all corporate decisions.
Inc. magazine says failure to keep written minutes of the tasks carried out on behalf of a new corporate entity is a common but fool-hardy mistake among many new owners of most business types.
Entrepreneurs should convene regular meetings of shareholders – in keeping with corporate bylaws – and write out all of the decisions approved by the board. Then, these minutes should be placed in a corporate record book.
The source says this is a good way to prevent losing the protection of a corporate status. Keeping accurate records of corporate existence will help ensure that courts recognize a business as a corporate entity, and it can protect business owners against being held personally accountable for corporate debts.
Additionally, good corporate records might even help a business more easily renew their certificate of status or earn a certificate of good standing.
Entrepreneurs who are prepared to do the work of documenting are probably ready to incorporate their businesses. Future business owners can seek the guidance of professionals at an incorporate service to learn how to incorporate their enterprises.