If you own a business registered with the Minnesota Secretary of State, you my have received a recent mailing that appears to be a “Notice” or “Disclosure Statement” from the State of Minnesota advising you to get your annual meeting minutes prepared. See example here: Mailer: Annual Meeting Disclosure Statement. The company behind the mailing, the Minnesota Corporate Minutes Company, is using these mailings to present an offer to prepare Minutes of Directors and Shareholders Meetings (for a corporation) or Minutes of Member and Governor Meetings (for a limited liability company –or LLC) for a fee. However, it’s important to know the company is a commercial enterprise that is neither affiliated with the State of Minnesota nor is it providing legal representation. I have had multiple clients contact me confused about their obligations and asking me what they need to do with this “notice.” Fortunately, they contacted me before sending their money or turning over potentially sensitive business and personal information.
The mailing does highlight important statutes relating to a corporation’s or limited liability company’s obligations to maintain books and records. It also refers to the concept of “piercing the corporate veil,” which means a court may decide to hold the owners of a company personally liable for the debts or obligations of that company if it has not observed the proper corporate formalities. Maintaining updated books and records, complete with meeting minutes, is one of those formalities. Moreover, this article is not intended to comment on the propriety of having another party prepare your meeting minutes or advise you on what they should contain. Nevertheless, businesses and business owners should fully understand with whom they’re sharing information, and of the other purposes to which that information may be put without the business or business owner’s knowledge or further consent.
Business owners can receive guidance on how to prepare annual meeting minutes from their lawyers, or they can have their lawyers prepare the minutes for them. Like many things, there are proper ways to establish and maintain a business identity and to protect the business owners from liability, but there are many mistakes that can be made along the way –any of which could be very costly to the business and its owners. In addition, your business lawyer has professional and ethical obligations to ensure the confidentiality and proper handling of your company’s information, and that of its owners. If you have any questions about a notice or offer that your business receives, or maintaining the protections against personal liability that your company was intended to provide, it usually pays to consult with a lawyer before acting on it.
Matt Drewes contributed this post. Matt is a Shareholder with Thomsen Nybeck. He is the head of the firm’s nine-member Community Association Representation Group and the firm’s Creditors’ Remedies Group, and practices in the areas of business and real estate litigation and transactions, employment law, construction litigation, community association law, debtor/creditor law and insurance. He has been included in the annual list of Minnesota’s Rising Stars for several years, and has been quoted in the Minneapolis StarTribune, Minnesota Lawyer, Habitat Magazine, Yahoo!Finance.com, Bankrate.com, MSN.com, HOALeader.com, and elsewhere on issues involving construction litigation, community associations and real property issues . He can be reached at email@example.com or by phone at 952.835.7000.