The importance of Corporate Maintenance. Starting a business is complex, but maintaining your business can be as complex and important. Only 25% of new businesses in the USA will make it 15 years or more. So, to increase the odds for you and your business, you need to pay attention to corporate maintenance. The bigger your business grows, the more complicated it will be.
Let’s start with the question. What is corporate Maintenance?
Corporate Maintenance is the practice of ensuring a corporation has all of the appropriate meetings, that the notices for all shareholder meetings follow state regulations, and that all corporate records are properly kept and stored.
Why do Corporate Maintenance and Compliance Matter?
Failure to properly maintain corporate records and to hold legally mandated corporate meetings could result in a court, the IRS, or the State
- finding that you are not a legitimate corporation. This type of finding can be legally and financially devastating for the shareholders and officers of the corporation.
Companies that do not follow good corporate maintenance practices risk:
- Dissolution of the corporation
- Creditors piercing the corporate veil
- The corporate veil being pierced during litigation
- A variety of IRS issues
- Not being able to consummate a sale or merger at the going market rate
Why you should have an attorney overseeing your corporate maintenance?
Because there are so many different things to keep track of, attorneys often help with corporate maintenance issues. They are responsible for reminding the corporate officers that a shareholder’s meeting needs to occur. They help complete and submit the annual report to the state. Attorneys can also help write up the minutes for shareholder meetings and record important decisions by the board and company officers.
Having an attorney oversee your corporate maintenance ensures that you stay in compliance and avoid things like piercing the corporate veil or having the IRS find shareholders personally liable for corporate tax obligations. If you operate in South California and need help with your corporate maintenance, make sure to contact Focus Law. Focus Law is a premier trial firm focusing on business, corporate maintenance, and partnership disputes. Call us at (714) 415-2007 or schedule a consultation by clicking here. You will be glad that you did.