How to Take Minutes at your S-Corp or Small Business’s Shareholders’ and Directors’ Meetings

If you’re the owner of an S-Corp or small business, you’re likely somewhat aware that keeping the S-Corp filing status comes with some legal requirements. One of which is holding annual shareholders’ meetings and periodic directors’ meetings and documenting what was discussed and any decisions made at these meetings in the form of minutes.

But what exactly are minutes? If you’re a business owner, new to the S-Corp election, minutes, or corporate meetings, you may not be sure what minutes are or what they entail. Who takes the minutes? What information should be included? Is there a format it should follow? And what do you do with minutes? Luckily, we’re an S-Corp as well and we’re here to help your small business.

Before we dig in, if you’re the owner of a sole proprietorship or single owner business and therefore not holding corporate meetings, minutes are still super important, but our other article “How to Take “Minutes” for Sole Proprietorships or Single Owner Small Businesses” is probably going to be a lot more helpful. You can also always give us a call and we’re happy to chat and answer any questions over the phone.

What Does the Term “Minutes” Even Mean?

“Minutes” is actually just a corporate or business term for notes taken, covering what took place at any shareholder or director meeting and any business changes or decisions, recorded in a somewhat official manner.

What is Covered at S-Corp Meetings?

S-Corp Shareholders’ Meetings

Shareholders discuss the business and have the rights to:

Elect or remove directors
Amend the articles of incorporation and bylaws
Approve the sale of assets and mergers
Dissolve the corporation

S-Corp Directors’ Meetings

Directors discuss business and have the authority to:

Issue stock
Elect officers- the people responsible for day-to-day management and operations
Set the salary amounts of employees and officers
Make real estate decisions
Approve loans

Who Takes the Minutes for S-Corp Meetings?

Typically the secretary of the corporation in larger corporations takes the minutes, but if your small business doesn’t have a secretary, you’ll just need to appoint someone as the minute taker. It’s also a good idea to give the appointee a copy of the meeting agenda in advance to make it as smooth as possible.

What to Include in S-Corp Meeting Minutes?

Housekeeping

Minutes should first begin with all of the necessary housekeeping items and include:

Company name
Meeting date and location
Names and titles of the meeting chairman and minute taker
Names of attendees and list of non-attendees
A statement of whether there were enough people present to pass motions and take actions, as required by state law or the business charter. This is called a “quorum.”
Time that the meeting began and when it adjourned
A statement about the previous meeting minutes

Agenda Items

After housekeeping items, the minutes should lead into agenda items and include under each item:

A summary of the discussion- include pros and cons, but who said each individual thing is not necessary to record
How much time was spent discussing the item
Any reports or materials that were handed out or presented
Any information presented by advisors or consultants and the outcome of those presentations
Any motions presented and details of who made and seconded any motion
A tally of the votes for any motion, how each participant voted, and the outcome of the vote- passed, rejected, or tabled

Bonus Tips for S-Corp Meeting Minutes

Any information presented or discussed by attorneys during a meeting should not be included in the minutes because minutes may be distributed to other parties, and including this information would violate attorney confidentiality.

As tempting as it may be to record or video meetings for your records, it’s not usually a good idea. Attendees may be less likely to voice their opinions if being recorded and oftentimes, a full recording may just be more embarrassing than helpful later on.

What to Do With S-Corp Meeting Minutes

After the minutes are finished, you should provide a copy for review to all of the meeting attendees. Minutes are not required to be filed with the state, but you are required to have them and be able to provide them if needed. You should keep all minutes in a secure location for at least seven years in case of an audit, but it may be helpful to keep them for longer in the event of a business sale in the future.

Hopefully you have a better understanding now of how to properly take minutes at your S-Corp’s next shareholders’ or directors’ meeting. Keeping great minutes may seem a little tedious right now, but trust us, it’s worth it and will save you a lot of potential hassle in the future.

Ready to learn more about S-Corps or in need of a bookkeeper to take the load off and handle all of your S-Corp accounting and small business taxes? Give us a call! We’re a small business just like you and our mission is helping other small businesses thrive.