It’s time to talk about a fundamental issue that gets overlooked way too often by eCommerce and Online Business Owners: the matter of meeting minutes.
Depending on what type of business entity you are, you’re required to have at least one meeting per year with your partners and/or shareholders. But even if you’re scrupulous about having these meetings, you may not realize the importance of recording minutes from your meeting.
For most eCommerce and Online Business Owners, meeting minutes are something it’s all too easy to be too casual about. But in fact, keeping meeting minutes is an essential way to protect yourself and your business.
If you’ve never kept meeting minutes before, don’t worry. The following is a refresher course on the what, why and how of meeting minutes for eCommerce and Online Business Owners like you.
What Are Meeting Minutes?
Meeting minutes are simply a record of official meetings that have been held in a company or organization of any kind. Meeting minutes provide a history of major discussions, as well as decisions that have been made. Things that got approved, things that got tabled, things that were decided needed to be brought up at a later date.
Who Needs to Keep Meeting Minutes?
In the TBL client community, we have freelancers, sole proprietors, single-member LLCs, LLC S-corps, C-corps…business entities of every kind. And guess what? They all should be keeping minutes. Yes, even the sole proprietors.
Basically, anyone conducting business needs to be keeping a record of major business decisions. Even if your “meeting” is taking place between your ears. it’s legally required to have those minutes present.
What Should Be Included in the Meeting Minutes?
I advise doing a little research on this topic and developing a template to make sure you’re consistent in what you pick up during your meeting. But it’s always good to start with the following:
- The location of the meeting and the starting time, the attendees who are present. If it's a cyber meeting, you can record who is present and when they came through in the video feed.
- A review of the agenda for the meeting and a vote and approval of that agenda.
- A discussion of the prior meeting's minutes and approval of those minutes, or any changes that would be approved.
- A discussion of old business items, new business items, any major topics of discussion, any major agreements that are made. This could be something as mundane as approving the opening of a bank account or a line of credit. It could be as large as launching a hostile takeover of the eCommerce or Online Business. 🙂
Basically, your meetings are for recording key decisions that were made, the key people that were involved, and when/where it all happened. Recording all those things provides a legal, public record of the decisions that were made in your business, and that the business then acted upon.
How Often Should Minutes Be Recorded?
The best practice would be to record minutes anytime a meeting is called in which business is going to be transacted on behalf of the company.
For a sole proprietor, you're having business “discussions” in your head all the time about transacting business. What you want to record in your minutes are the major decisions–opening up a line of credit, making a major equipment purchase, executing a rebrand, etc.
For other entity types–LLCs, partnerships, S Corps, C Corps–your operating agreement or your bylaws will dictate the minimum number of meetings you need to have. You need to record minutes at all these meetings, as well as anytime you need to get together to make decisions that bind the company.
The danger of not recording minutes in a meeting is it leaves you open to accusations that you did things maybe you didn't do or didn't do things that you alleged to do, especially where there are two or more partners, directors or shareholders involved. The best solution, the best protection is always to operate with total transparency, and that’s what keeping minutes helps you do.
Do Meeting Minutes Affect Taxes?
They absolutely do. If you're a corporation and you get an audit, odds are one of the first things the IRS will request to see are your meeting minutes. If you can't produce them, then you’re vulnerable to several types of penalties.
- For any entity, you’ll be looking at back taxes, penalties, and interest, including penalties for severe underpayment or frivolous returns, all kinds of mess.
- If you’re an S-Corp, you stand to lose your S-Corp election.
- As an LLC, you open yourself up to tougher questions and an audit that digs deeper.
- If you're a C Corporation with third party shareholders, you really have got to be transparent and open. You can pick up the Wall Street Journal any day of the week and read about a disgruntled group of shareholders who were left in the dark about major decisions and felt like the company was not acting in their best interests. As a C corp, you're employed by the owners, and your first responsibility should be to them.
If you feel like you’re nowhere close to that level yet, remember that what you build today is what you own tomorrow.” don't play small while you're trying to be big. From the very beginning, put practices in place that will support the business you want to grow. No entity is too small for this to matter.
But if you can produce the minutes that say here's where we approved doing this, here's what we approved doing, this is why we did this, then it provides the auditor with a roadmap to your decisions, and an assurance that your transactions are legitimate.
Meeting Minutes Do’s and Don’ts
Do have your minutes signed off on by the secretary or the recorder of those minutes. That way, if there are questions, people know who to go back to for clarity.
Do bring up your last meeting minutes for approval at the next meeting. That way, everyone gets a chance for discussion—especially important if there were members that were missing, or if there are questions or corrections. Nobody's perfect, and so you can get things wrong. Once those minutes are approved, they become an official record.
Do keep your minutes simple—no need to go overboard on the detail. That said, if you’re unsure, go ahead and record it. It’s usually much better to overreport than to under-report. Worst case scenario, those overly detailed minutes may provide some interesting reading in the future. (Ask me sometime about the minutes I once found from a 1920s Baptist church, which expelled a few members for having been caught dancing in public. Quite the scandal.)
Don’t assume that because you’ve never recorded minutes before, there’s no point in starting now. Instead, think back and make a list of major items that have been acted upon in your business over the years. Then read that list into the record of the next meeting held. If there are multiple partners or shareholders involved, have them vote their agreement that those things were voted on previously and approved. It's not perfect, but it's a decent solution to getting started on a basic business requirement.
Don't do a shortcut by simply creating an audio recording of the entire meeting and calling it your minutes. You don’t want an endless verbatim recording of every little thing that got said. On the other hand, you don’t want notes scribbled hastily on the back of an envelope. It’s a question of balance between being too vague or brief, or too detailed and wordy.
Don’t assume that because nothing “happened” at a meeting, you don’t need minutes. If there are no major decisions, just record something like, “Here was the general discussion about these topics, no decisions were made from the meeting, and the meeting was adjourned.”
The Bottom Line
Even though keeping meeting minutes may sound like small details or busywork, it makes a big difference. Documenting the materially significant decisions in your business really does protect you, and ensures clarity and confidence as you grow.