Are you keeping meticulous corporate records?

Improper corporate record keeping can cause problems with the IRS, hamper your ability to raise equity capital and could result in personal liability. Yet, entrepreneurial businesses are notorious for overlooking basic corporate records. Failure to document meetings of the Board of Directors and shareholders, failure to record stock issuances and to document stock transfers, and failure to approve material corporate transactions outside the ordinary course of business are common infractions of the guidelines that protect the legal status of your corporation or LLC.

Widely-publicized cases of misuse of corporate funds have courts “piercing the corporate veil,” or disregarding the corporate entity and holding founders and shareholders personally accountable for claims directed against the company.

Keeping proper corporate records is a solid way to prove that your business is real and valid, and not just a monetary shelter for shareholders.

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