As a Corporate Attorney in Atlanta who advises sole proprietorships, partnerships, and corporations, it is important to remember that each entity is more than just a name on paper that you take on to take advantage of various tax benefits.
Even if you have a simple family-owned business formed as a C Corp, that is no more than you and your spouse as the sole directors and shareholders, it is still important to observe basic required corporate formalities if you want to maintain the protection from personal liability that such a corporation provides.
If you fail to observe these basic formalities, you could risk your C Corp being disregarded by a court in an action called “Piercing the Corporate Veil” where the court holds that you indeed do not have a proper corporation and therefore can be held personally liable for any and all debts.
So, to avoid this and maintain the corporation you have established, what do you have to do?
Annual Meetings. Shareholders and directors must generally meet at least once a year to approve and authorize new business, elect new directors and officers, etc. Of course if this is just you and your spouse, partner, friend, etc., this can be as simple as sitting down or discussing over the phone the business of the company. The key to formalizing this step is keeping records of the meeting known as Minutes.
Minutes. Be sure to keep timely and accurate minutes of all shareholder and director meetings. In other words, write down what actions were discussed, agreed to, and taken, when, by whom, and where. The proper form for Minutes can be obtained from a licensed Georgia Business Attorney.
Consent Forms. Forms for “Actions by Unanimous Written Consent” can also be obtained from your business attorney to formalize and record decisions made at these meetings.
REMEMBER: THERE IS NO SUBSTITUTE FOR FOLLOWING GEORGIA CORPORATE FORMALITIES
At The Libby Law Firm we advise C Corps, Subchapter S Corps, LLCs, and many other types of corporations and business entities on following corporate formalities. Our Atlanta Business Lawyers know the importance of following corporate formalities and how this can prevent you from being personally liable for corporate debts, judgments, and other liabilities of your corporation.
If you are presently not following the requisite corporate formalities, time is of the essence in learning. To learn more about how the Atlanta, Georgia Corporate Attorneys at The Libby Law Firm will protect and promote your corporation, please do not hesitate to Contact Us. Our Firm can represent you in understanding, implementing, and following the necessary corporate formalities. If necessary, our Firm will engage in an aggressive corporate litigation campaign on your behalf in order to protect you from personal liability.
Contact our Atlanta Corporate Lawyers at our Main Office set up a meeting today. You should contact us immediately to come in for a consultation and to proceed with becoming a proficient in how to protect your corporate and personal assets.
You can contact our Main Office by calling our (404) 467-8611. The Libby Law Firm Main Office can be found conveniently located in Buckhead Section of Atlanta. You can also use our confidential Contact Us Form.