One of the major benefits for a small business owner in choosing to form a limited liability company, or LLC, over a corporation is that maintaining the formalities for an LLC is a simpler process. If the owners of a corporation or LLC do not maintain legal formalities, a creditor may be able to pierce the corporate veil and hold the business owners personally responsible for business debts. Unlike a corporation, however, an LLC is not required to hold annual meetings.
LLC Annual Meetings
LLC owners, called members, are not required by state LLC statutes to hold an annual meeting and keep minutes. However, the LLC structure allows members to determine how an LLC will be structured and operated by executing an operating agreement. In this document, members may choose to include a clause requiring an annual meeting and a requirement to keep minutes at the annual meeting.
Read More: LLC Member Rights
LLC Annual Filing Requirements
All states require an LLC to file either an annual or semi-annual report with the state agency responsible for registering business organizations. This report typically requires an LLC to set forth the name of the LLC, the street address of the LLC's principal place of business, the name and address of any LLC managers and members, and any changes in the LLC's registered agent and registered office. No state requires the submission of the minutes of an annual meeting as part of an annual or semi-annual report.
While no state requires an LLC to hold an annual meeting and keep minutes, there are significant benefits to doing so. If a creditor of the LLC sues the LLC and seeks to pierce the corporate veil to hold LLC members personally responsible for LLC debts, holding an annual meeting and keeping minutes is strong evidence that the formalities of the LLC have been maintained. Additionally, if a dispute arises between LLC members that results in litigation, the minutes of the LLC's annual meeting may be highly relevant evidence. Holding an annual meeting also affords LLC members the opportunity to vote on important business matters.
LLC Meeting Minutes
The minutes of an LLC meeting should include the date, time and place where the meeting is held; a list and results of any votes conducted among LLC members; and a status update on the LLC's long-term goals. LLC members present at a meeting should sign the minutes at the conclusion of each meeting.
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