In advising hundreds of closely held companies over the years, one of the things I often recommend to clients is a corporate clean up. What’s a corporate cleanup? It’s a term used to describe the process of taking a deep dive into a company’s organization or incorporation documents, bylaws or operating agreement, and other records and contracts and doing somewhat of an internal audit.
Business owners are too busy running their business, especially when first starting out – they are focusing on strategy, marketing, developing a product or providing a service. They often don’t have the resources to make sure these items are in place, or they simply slip through the cracks.
One of the most important reasons for conducting business within a legal entity, such as a corporation or LLC, is to maintain limited liability. One of the keys of maintaining the limited liability and avoiding the piercing of the corporate veil is keeping the corporate formalities in place.
Every company should have the following in place and kept among the records:
It’s important to maintain these documents so that the veil separating a corporation and its shareholders stays in place and protects the company’s owners from being liable for the company’s actions.
If you would like to assess whether your company has what it takes in place, or discuss whether you need a corporate clean up, please contact me.
The business and employment attorneys of Dalton & Tomich take your business just as seriously as you do. Attorneys Zana Tomich and Noel Sterett are trusted by closely held family businesses and others across Michigan and Northern Illinois as invaluable partners and counselors. We guarantee all your calls and emails will be returned within one business day so you can focus on what you do best: running your business.
Noel’s guidance was much appreciated when redrafting my client contract. He was very professional, respectful of my time and potential costs, and was sincere with his advice. I trusted that he had the highest good for my business in mind. I will seek out his […]Read More
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