Watch out. Some of our business clients are receiving official-looking documents that cite state laws about holding and documenting annual meetings. The pitch is for a service that will manufacture meeting minutes for $125, an unnecessary fee for a product of questionable value. Ignore this misleading mailing, but take it as a timely reminder.
Like the “best” deceptive practices – and by that I mean the ones that convince otherwise sensible people to do things that they shouldn’t or don’t need to do – this one is built on at least a kernel of truth. Corporations, in particular, do indeed have obligations to hold annual meetings and keep minutes of those meetings. LLCs, on the other hand, being less formal and not subject to the same statutory requirements, do not have obligations to hold annual meetings and keep minutes. However, it is always our recommendation to treat your LLC as a corporation and keep accurate records of its actions to preserve the limited liability shield. The recordkeeping requirements of corporations and LLCs may vary depending on the jurisdiction in which your business was formed and the kind of business entity it is.
Aside from recordkeeping, deadlines are coming up for all domestic and foreign corporations and LLCs to file their Personal Property Tax Returns in Maryland. All entities formed or registered in Maryland on or before January 1, 2015 must file their Personal Property Tax Returns no later than April 15th. If your company is formed or registered in the District of Columbia, then you may also be obligated to file your Biennial Report this year by April 1st. In Virginia, all domestic and foreign corporations need to file their annual reports and annual registration fees on or before the anniversary of their formation/registration. All LLCs are required to pay annual registration fees, but do not have to file annual reports.
This is where the real risk to your business comes in. States generally do NOT remind you proactively about these requirements. It’s up to your business to know what your corporate obligations are, and when, where and how to address them. Even if you fail to meet only one of them, your corporate or LLC charter may be forfeited/revoked. But if your business confronts a law suit, tax issue or potential acquisition, then the absence of its annual documentation, or its lack of good standing, can increase your personal liability and damage your ability to respond effectively.
That’s where we can play a crucial role as your business attorneys. On an annual basis we work with you to determine what significant actions your business took over the last year including, for corporations, the election of officers and directors, and assist you in documenting those actions. We provide the same assistance with LLCs. We also help our clients track their statutory reporting obligations in various jurisdictions, including Maryland, Virginia and the District of Columbia, and assist them in meeting those requirements, so that they remain in good standing.
Do you know what the filing and document requirements are for your business? Are you confident that you are adequately meeting them? If you have questions or need help, please contact me at (240) 778-2330 or ljacobs@mcmillanmetro.com. My colleagues and I will be glad to assist you.