A corporate book contains a business’s corporate papers all in one place. A business forms its corporate book when the business is started. It contains vital documents such as articles of incorporation, bylaws, meeting minutes, operating agreements, buy sell agreements, shareholders, and unit holders. It is very important to keep these documents up to date. This is important for all small businesses and particularly for those with more than one owner.
The corporate veil is an important protection. It provides a barrier between your business assets and your personal assets. The corporate veil may be pierced and no longer protect you if you don’t abide by the bylaws or operating agreement in your corporate book. This makes you vulnerable if you become involved in a lawsuit or bankruptcy.
The corporate book may be necessary to secure a loan. Lending institutions commonly require the corporate book to ensure that the individual requesting the loan is authorized to do so. When the books aren’t current, the loan process can take a lot longer and incur additional expenses.
Finally, you may need your corporate book when it’s time to sell your business. A buyer may want to see the book to learn as much about the business as possible. Important information will include whether the person trying to sell the business has the authority to do so.
Creating a corporate book and its documents is an involved and crucial process for a small business. Once the book is created be sure to maintain it throughout the life of your business. Contact Shoffner & Associates for help with your corporate book and any of its components.
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Starting a NEW business or know someone that could use our help? Call your friendly neighborhood attorney today.
Freya Allen Shoffner, Esq.
Shoffner & Associates
Counselors to Small Business and Families.
Give Freya a call at (617) 369-0111 TEXT US (413) 207-6219 or email fashoffner@shoffnerassociates.com
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