Last Friday I was the speaker for the Central Orange County Chapter of Fore Networking at Mile Square Park Golf Course in Fountain Valley, California. My topic was “Maintaining Your Corporate Books.” 
While there are advantages and disadvantages to each business structure (sole proprietor, limited liability company, corporation), a popular benefit of forming a corporation for your business is limiting your personal liability. However, in order to reap the benefits of such protection, you must observe the corporate formalities and make sure the line between you and your business are clear.
Failure to maintain your corporate books is fodder for a plaintiff to claim that you are not maintaining your corporate formalities, that you and your corporation are the same under the alter ego theory, and therefore the corporate veil must be pierced. Thus, it is important that corporations maintain their books, but often times owners are busy running their business to remember why they formed a corporation in the first place.
Good Business Practices
Having the annual meeting for your corporation isn’t just good procedure from a legal stand point, but from a purely business perspective, it’s a good time to sit down and review the past year as well as prepare for the upcoming year.
If you have a corporation for your business, take a few minutes to look at your corporate books and see if your minutes and other corporate documents are up to date. If you need help catching up, please consult your business attorney to assist you.
—
Dan X. Nguyen, Esq. is an attorney based out of Orange County, California that practices in the areas of business law, real estate, and estate planning and enjoys working with entrepreneurs but doesn’t like to remind them of the importance of maintaining their corporate formalities every single day. Information on this site is for informational and educational purposes only; it does not constitute legal advice nor does it create an attorney-client relationship. Should you need assistance, please contact an attorney to help you with your specific set of facts.
Related posts:
