Other Articles By Dick Couser
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Maintaining Your Corporation
Whether you are a small business owner or a church or other religious organization, chances are the organization is incorporated. If not, it should be, or should be organized in some other form appropriate for a business organization such as a partnership, limited partnership, or limited liability company.
While for profit and nonprofit corporations are established under different laws and have different requirements, both require attention to corporate maintenance. Accurate and current records should be kept reflecting who the members or shareholders are. Annual meetings of the members or shareholders should be held and the governing bodies–board of directors, board of elders, etc. elected in accordance with the corporate bylaws. Annual meetings of the governing body should be held in which officers are elected in accordance with the bylaws. All meetings should have complete and accurate minutes. Minutes do not need to include details of discussion that occurs but it is important that they record any votes or actions taken. Votes should, where appropriate, indicate what officers are authorized to act on behalf of the corporation.
Maintaining corporate existence also requires periodic filings with the Secretary of State. Nonprofit corporations, including churches, must file a return on the years ending with "0" or "5", identifying their principal address and the names and addresses of their governing body. For profit corporations must file an annual report in the first quarter of each year. Any amendments to the Articles of Agreement, the governing document of the corporation, must be filed with the Secretary of State, and in the case of nonprofits, also with the Town Clerk of the town which is their principal place of business.
Corporations, either nonprofit or for profit, using trade names other than their corporate names must register the trade name with the Secretary of State. For profit corporations must also maintain a registered agent and registered office with the Secretary of State. Corporations doing business in states other than their state of incorporation must file appropriate registrations as a foreign corporation with the Secretary of State of the states in which they are operating. Nonprofit charitable corporations must register with the State's Division of Charitable Trusts in the Department of Justice, unless they are within certain exceptions that include churches.
There are a number of other legal requirements for corporations, depending on their circumstances.
Inattention to these matters has a number of potential adverse consequences, including:
• Loss of corporate status, with potential personal liability for shareholders or members;
• Confusion and potential litigation over who has authority to vote or act;
• Lack of access to courts to enforce rights;
• Being unaware of actions brought against the corporation due to out-of-date information on record as to where and on whom notice and service of process should be sent;
• Being bound by the acts of persons no longer authorized to act on the corporation's behalf.
Attention to corporate maintenance, and legal advice where appropriate, should be part of the routine for every corporation.
