California Corporate Code 1500: Corporate Minutes
When establishing a company, one of the first and most important decisions you will have to make is whether to form the company as a corporation, an LLC, or any of the other common forms of business organization. Each of them offer various advantages and drawbacks to their ownership and, as such, it is up to you to look into which one will most effectively fit the needs of your business. To help with that crucial decision, we have several articles which go over the different pros and cons of each method of business organization.
Corporate Minutes Housekeeping Dos and Don’ts
Should you choose to go with making a corporation, you will then be faced with having to more rigorously document certain proceedings as a result of how California law interacts with corporations. Some view these more specific details as a nuisance that corporations simply must contend with. We, however, believe that many aspects of the extra bookkeeping that you must track and report are actually very strong indicators of the strength of corporations. By viewing these requirements from that perspective, we can greatly simplify and empower the role that the bookkeeping tasks serve.
California Corporate Code 1500: Corporate Minutes
The whole reason that corporations have to deal with a detailed and pesky bookkeeping record is because California law requires it. According to California Corporation Code 1500, every corporation must maintain a detailed and accurate record of accounts and outlines of the time that the executives and owners spend on meetings. In fact, even shareholder, board, and committee meetings and decisions must be documented and housed in the executive headquarters. Further, all shareholder names, addresses, and amounts of shares owned must also be accounted for in the report. For smaller corporations, this is already a nightmare to contend with, but the larger your corporation grows, the more annoying and tedious this law becomes.
Corporations: Acceptable Means of Bookkeeping
The other part of this dilemma to consider is how exactly all of that information is going to be stored. Clearly, the records must account for information that is not only sensitive but also deeply personal and intimate with respect to the company and its shareholders. All of those people are going to be relying on the corporation to ensure the safety of their credentials and information.
To that end, there are a few methods of bookkeeping that are worth discussing. The law only goes so far as to specify that the records must be kept either in written form or in some other form that is capable of being converted into a clear, legible, tangible form, or any combination of the aforementioned. Therefore, you actually have some wiggle room here in terms of deciding how to store the necessary information. You can, of course, choose to go the traditional route of simply keeping all the information on hand in paper form. The upside is that you will always have the original paper copy of the records, but the obvious downside is that those records are susceptible to being permanently lost or damaged. The alternative would be to store those records digitally, by uploading them onto your corporation’s secure server from the beginning by means of software. The pro in these situations is that you are unlikely to ever completely lose all of your important bookkeeping records, but the drawback is that now all of that sensitive information is potentially vulnerable to online attack. In these situations, cybersecurity becomes a major concern.
Contact a California Corporate Lawyer
As we have seen there is no one method that manages to avoid all risk, and that’s a large part of the reason why California Corporate Code 1500 can be such a hassle for corporations to deal with. However, we can help. Our firm has extensive experience with helping businesses through the issues that may arise from record keeping as per California Corporate Code 1500. We invite you to us a call at (310) 943-1171 to speak with our California corporate lawyers today.
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