If you run a limited liability company (LLC), you might be asking yourself whether you are required to hold meetings and keep official minutes. Unlike corporations that have strict rules around holding annual meetings and keeping records, LLCs have much more flexibility when it comes to internal operations and governance.
However, while meeting minutes may not be legally mandated for LLCs in most states, there are some important advantages to implementing this practice. In this article, we’ll explain what LLC meeting minutes involve, if they are truly necessary, and the key benefits of keeping meeting minutes for your LLC business.
What are LLC Meeting Minutes?
LLC meeting minutes are the written documentation of discussions and decisions made during official meetings of the LLC members (owners). The minutes serve as a record of things like:
- Attendance at the meeting
- Voting results
- Updates on company goals/milestones
- Changes to the management structure
- Approval of important proposals or transactions
- Financial reporting and budget discussions
The level of detail can vary, but well-crafted minutes give a clear picture of the key topics covered and formal actions taken during the meeting.
Are LLC Meeting Minutes Required?
No U.S. state legally requires LLCs to hold annual meetings or record official minutes. This is one of the advantages of the LLC entity type compared to corporations. However, the operating agreement for a multi-member LLC can stipulate meeting and recordkeeping requirements if the members desire.
For single-member LLCs, annual meetings wouldn’t make sense since there is only one owner. But even single-member LLCs may want to document meetings with attorneys, accountants, or advisors where important company decisions are made.
Benefits of Keeping LLC Meeting Minutes
While not legally mandated, implementing an LLC meeting minutes policy offers some valuable benefits:
Enhance Corporate Veil Protection
Keeping LLC formalities like holding meetings and recording minutes can help maintain the liability shield between the company and its members. The lack of recordkeeping could be used as evidence that the LLC is not truly operating as a separate business entity.
Improve Organization and Communication
Regularly scheduled meetings create a forum for owners to effectively communicate, review financial performance, implement strategic plans, and make key decisions in an organized manner. Having clear minutes avoids misunderstandings down the road.
Resolve Ownership Disputes
If there is ever a disagreement between LLC members, detailed meeting minutes showing voting decisions can help resolve the conflict by serving as an official record of approved actions.
Demonstrate Diligence to Third Parties
Comprehensive minutes can demonstrate to external parties like investors, creditors and the IRS that the LLC is a legitimate, well-run business entity following governance best practices.
What to Include in LLC Meeting Minutes
At a minimum, LLC meeting minutes should document:
- Date, time, and location of the meeting
- Members in attendance
- Major topics discussed and decisions reached
- Results of any voting that took place
- Outstanding tasks/action items assigned
- Approval of the meeting minutes themselves
Many templates are available providing the proper formatting and sections to include all pertinent details in an organized manner.
Using Consent Resolutions In Lieu of Meetings
There may be times when physically gathering all LLC members for a meeting is impractical. In these cases, LLCs can use a consent resolution (or unanimous written consent) instead of holding an official meeting.
With a consent resolution, the proposed resolutions, transactions or other decisions are documented in writing and circulated to each member for their review and signature approval. Once all members have consented in writing, it has the same legal effect as if a meeting had taken place.
Should You Implement LLC Meeting Minutes Requirements?
While meeting minutes are optional for LLCs from a legal compliance standpoint, the various benefits of implementing this governance practice are quite valuable – especially for multi-member LLCs. Consistent meetings and detailed minutes:
- Reinforce the LLC’s legitimacy as a business entity
- Facilitate organized operation and communication
- Provide an official record of key company decisions
- Help prevent/resolve internal ownership disputes
- Demonstrate diligence to outside parties
By establishing an LLC meeting minutes policy in your operating agreement, you’ll be taking an important step to properly maintain your company’s liability protection and credibility. The effort is well worth ensuring your LLC operates as a professionally run business.
Conclusion
In conclusion, while LLC meeting minutes are not strictly required by law, they provide significant benefits for multi-member LLCs in terms of organization, communication, dispute resolution, and credibility with third parties. Taking the time to properly document meetings reinforces the LLC’s legitimacy as a business entity and can help maintain its liability protection. For these reasons, implementing an LLC meeting minutes policy is a recommended best practice.
Alfie Wilson, Esq., is a legal content writer with expertise in business formation, criminal law, veterans disability, family law, DUI law, personal injury, animal welfare, and legal writing. He holds a J.D. from Emory University School of Law and has experience in appellate advocacy and regulatory matters. Alfie’s passion lies in breaking down complex legal topics for a non-lawyer audience. He currently writes for law firms and non-profits on various issues and resides in Arlington, Virginia.
