Every state requires a corporation to have an annual meeting. Board members can choose to call additional meeting to decide on unusual items. The process for holding and calling meetings are documented in the by lawsIn the case of a single shareholder, it may seem pointless organizing a meeting. Being the only one in a room wearing 3 hats (shareholder, board of directors and executive president) might seem a little schizophrenic. However, you must take into consideration that the purpose of shareholders meeting is to provide documentation of important decisions.
If these important decisions are not documented in the minutes the courts can hold that the corporation is really a sole proprietorship.
When special meetings should be called:
- When the corporation seeks to take a loan
- When the officers compensation needs to be altered
- To adopt a new policy
- To issue dividends
As a sole shareholder you can also write a statement of unanimous consent rather than going through the traditional meeting procedure.
How to hold a corporate meeting as a single shareholder
It is advisable to schedule the meeting ahead of time. Also, try to have an agenda of items to be approved. Being a single shareholder does not excuse you from meeting state law requirements. All approved decisions should be recorded.
Store the minutes in safe place. It is advisable to have a binder of important corporate documents.
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