HERITAGE PLUS FINANCIAL, INC. - An Alliance of Professionals - Income Tax, Business, Financial, Legal

Heritage Plus Financial, Inc.
13211 Jones Road
Houston, TX  77070
Office: (281) 894-0499
Fax: (281) 890-1329

Corporate Books
       
     

Since the mandatory application date of January 1, 2010, the BOC applies to all Texas corporations, partnerships, limited liability companies, and other domestic filing entities, as well as all foreign filing entities registered to transact business in Texas. The BOC applies regardless of an entity’s formation date or whether the entity has taken affirmative steps to adopt the BOC.

Texas Business Organizations Code - Section 3.151. Books And Records For All Filing Entities
(a) Each filing entity shall keep:

(1)  books and records of accounts;                      

(2)  minutes of the proceedings of the owners or members or governing authority of the filing entity and committees of the owners or members or governing authority of the filing entity;

(3)  at its registered office or principal place of business, or at the office of its transfer agent or registrar, a current record of the name and mailing address of each owner or member of the filing entity;  and

(4)  other books and records as required by the title of this code governing the entity.
          

(b)  The books, records, minutes, and ownership or membership records of any filing entity, including those described in
Subsection (a)(4), may be in written paper form or another form capable of being converted into written paper form within a reasonable time.

              

(c)  The records required by Subsection (a)(2) need not be maintained by a limited partnership or a limited liability company except to the extent required by its governing documents.

 

The law is on your side.  
One of the primary reasons for forming a corporation is to protect its shareholders against business liabilities. Protect yourself well by observing corporate formalities that will maintain a strong “corporate veil”.  Under the doctrine of “piercing the corporate veil,” a shareholder loses this protection against personal liability.  Conducting Annual Meetings and keeping Corporate Minutes of those meetings maintains corporate privileges.  

Compliance can also eliminate issues in litigation, selling your business, IRS audits, bankruptcies, and “missing founders” claiming they own shares when a “value event” occurs.  It is important to keep the Corporate Minutes and other documents that prove those formalities were observed. Your records should evidence actions taken or approved by the Board of Directors and by the shareholders.

The Minutes of the first corporate meeting should indicate that directors were named, stock was issued to shareholders, and the corporation was capitalized. If you cannot show the issuance of stock for consideration (money or assets), the corporate veil may be challenged based on inadequate capitalization.  

The State of Texas has the right to confirm if Annual Meetings and Minutes were conducted if legal or financial problems affect your corporation, such as during State tax audits or lawsuits. If the Annual Corporate Minutes are not fulfilled, it could result in forfeiture of corporate privileges. Corporate Minutes serve as a history of the business' activity.  Meeting Minutes provide proof to the IRS and company shareholders that a business is operating as a legal entity and are required in federal and state guidelines for operating small businesses.

Once your corporation has been forfeited by the Secretary of the State of Texas, you cannot legally conduct business as a corporation and may not sue or defend a law suit. Contracts made by a forfeited corporation can be voided at the option of the other party.

The corporate book should also be one place to look for all key records regarding the organization and operation of the corporation. If there is any challenge to the corporation, the proof of proper operation should be there. In addition to the Bylaws and Minutes of meetings, other documents such DBAs filed by the corporation, and a copy of the Statement by Domestic Stock corporation filed by the corporation can quickly support a challenge. Having these in the corporate book helps the business owner and advisor to quickly check to make sure, for example, that a DBA isn’t filed in the name of the individual or a partnership, and that filings with the Secretary of State are up to date.

Having copies of bank resolutions authorizing signatures on bank accounts and the shareholder agreement makes the corporate book a quick source of other corporate information.

Texas Business Organizations Code > Title 2 > Chapter 21 > Subchapter H - Shareholders' Meetings; Notice To Shareholders; Voting and Quorum

§21.351 Annual Meeting
§21.352 Special Meetings
§21.353 Notice of Meeting
§21.3531 Notice by Electronic Transmission
§21.354 Inspection of Voting List
§21.355 Closing of Share Transfer Records
§21.356 Record Date for Written Consent to Action
§21.357 Record Date for Purpose Other Than Written Consent to Action
§21.358 Quorum
§21.359 Voting in Election of Directors
§21.360 No Cumulative Voting Right Unless Authorized
§21.361 Cumulative Voting in Election of Directors
§21.362 Cumulative Voting Right in Certain Corporations
§21.363 Voting on Matters Other Than Election of Directors
§21.364 Vote Required to Approve Fundamental Action
§21.365 Changes in Vote Required for Certain Matters
§21.366 Number of Votes Per Share
§21.367 Voting in Person or by Proxy
§21.368 Term of Proxy
§21.369 Revocability of Proxy
§21.370 Enforceability of Proxy
§21.371 Procedures in Bylaws Relating to Proxies
§21.372 Shareholder Meeting List


Corporate Records: 

  • Articles of Incorporation (also amendments, if any)
  • Bylaws (also amendments, if any)
  • Stock certificates
  • Notice of Transaction or other securities form for every issuance of stock
  • Stock ledger completed to last issuance or transfer of stock
  • Statement by Domestic Stock Corporation for every year
  • Bank resolution card authorizing signatures
  • List of assets transferred into corporation
  • DBAs (if any)
  • Minutes of shareholders' meetings (at least one per year)
  • Minutes of directors' meetings (at least one per year)
  • Proof of notice of meetings, especially for meetings involving potential disputes
  • Promissory notes for loans from shareholders
  • Shareholder agreement
  • Form evidencing election of S corporation status
  • Corporate seal

Contact us today to Produce transcripts of your Corporate Minutes that will keep you in full compliance with Texas corporate law.