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Safe Corporation
How to invest and be safe?
A friend of mine is coming into about a hundredthousand dollars in May, he wants to make his own investment company. Being the President and C.E.O. make his own corporation that way if he gets sued for anything, they can't touch that maoney. I need the cost of such a transaction.
I think your friend will need to take professional advice.
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McDonald's Appeal? A 'Safe' Meal - Max Barry
Importance Of Maintaining Corporate Records
The limited liability protection offered to corporate shareholders is by far the most important and distinctive advantage of incorporation. To enjoy the benefits of incorporation, the company must observe corporate formalities and properly maintain corporate records and accounts. This helps the corporation retain its corporate status and protects its officers and shareholders from personal liabilities.
Protect Your Corporate Status
Corporations must maintain current and proper corporate records so that creditors, which include the IRS, are not able to challenge the validity of the corporate shield. The corporation must maintain corporate records of all meetings and store them in a safe place, since it is critical to maintain the corporate shield.
By maintaining corporate records the corporation meets state reporting and filing requirements. If a corporation doesn't maintain corporate records or is unable to annually report and file records, the corporation might get dissolved. Keep the corporation in good standing by maintaining the necessary records. This helps the corporation pay all necessary federal, state, county, and business taxes, including franchise taxes.
The Importance Of The Minutes Book
Corporate minute books serve as official corporate records. Keeping them up-to-date is high on the priority list. The company must ensure that the minute books are able to demonstrate share ownership of the corporation. This is of primary importance, as the minute books are the official source of documents. Maintain the minute books so that they exactly reflect when the shares of stock were transferred and who owns them. They must contain the original stock certificates or share register of the owners.
Maintaining of the minute books record allows people to understand the decision-making processes of the corporation. They can also reveal when decision makers ceased to function properly. By maintaining corporate records in minute books, people leave a trail of the decisions and the transactions of the corporation.
Maintaining corporate records in the minute books is also important as an audit backup. This helps determine effective dates for tax purposes and helps ascertain justification for the accrual of expenses and fixed obligations. They grant corporate directors and officers the authority to act. Up-to-date records allow the corporation to avoid challenges to the corporation's authority to take certain actions.
Maintaining corporate records in the minute books displays the official standing of the corporation. This establishes the background record required to facilitate corporate transactions, which include the issue of shares and the sale of the actual corporation. Inaccurate maintenance of the minute book records turns the simplest of corporate transactions into a costly experience for all involved. An accurate maintenance acts as the official recording of the compensation and dividends that the corporation is required to pay. Well maintained corporate minute books are an effective means of creating a paper trail in order to demonstrate to the CCRA and other government authorities the numerous payments the corporation has made.
Additional Help
There are software packages available online to maintain proper records for a corporation. These software packages guide the owners of corporations through the process of maintaining minute books.
About the Author
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their
web site http://www.smallbusinessconsulting.com
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