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 requests, among other things, the identity of officers, directors, and even shareholders, including their names, email addresses, and/or mailing addresses. This information, once turned over, is subject to use for whatever means Minnesota Corporate Minutes Company may wish. Despite requesting personal information about anyone involved with the business, the mailing contains no indication of a privacy policy or a limit to the soliciting company’s permitted use of the information. The requested information is the kind of data advertisers and marketers often purchase so they can target their efforts at certain groups, such as a list of confirmed business owners and operators in Minnesota. We are not aware of information suggesting that Minnesota Corporate Minutes Company has sold or intends to sell the business or personal information it receives. But in general, if you are the officer or manager of a business, and you turn over information about your company’s shareholders to an entity with which you are not familiar, with which there is no attorney-client relationship, which is not a government agency, and which has no bounds on its ability to use that personal information, you have the potential to face some tough questions from those shareholders, or worse.
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 mdrewes@tn-law.com or by phone at 952.835.7000.
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