What is an annual meeting?
Every year, corporations gather together all their shareholders to talk about the state of the company. This is an annual meeting. It’s also called the “general meeting” or the “shareholder’s meeting.”
Are all businesses required to hold an annual meeting?
It depends. LLCs only need to hold one if required in the company’s Operating Agreement. Corporations are legally required to hold an annual meeting.
What about S-Corporations?
The terminology can be tricky here. It depends on the type of legal entity of the “S-Corp.” This is because the term “S-Corp” refers to a method of taxation, not a type of legal entity. The requirement for an annual meeting lies in the legal, not tax, status of the business. To be sure whether or not your business is required to hold an annual meeting, check to see whether it is an LLC or a corporation.
Is every corporation required to hold an annual meeting?
Yes. Illinois law (805 ILCS 5/7.05, if you’re interested in researching yourself!) requires that every corporation hold an annual meeting.
When should my company have an annual meeting?
The law does not stipulate when the meeting should take place. However, the company’s bylaws will have a section regarding the annual meeting, and may include a specific date. If no date is stated, the directors should agree on a time and place and send appropriate notice to the shareholders.
Can my company hold an annual meeting remotely?
Yes. If the place for the annual meeting is not stated in the bylaws, then the meeting should be held at the registered office of the corporation (also known as the principal place of business). However, the shareholders can agree to hold it elsewhere.
What is discussed at the annual meeting?
Any issues about the corporations standing are up for discussion. There are a few items of particular importance that, if relevant, generally dominate the agenda. These include:
- Election of directors, especially if there’s a vacancy or a director’s term is up for renewal.
- The status of the corporation and any upcoming plans or projects
- Reviewing and discussing the corporation’s annual report
Also, shareholders should vote on anything needing their attention. As with scheduling, a more in-depth description of such matters should be laid out in the company’s bylaws.
How to take and record meeting minutes at an annual meeting
What are minutes? Simply, minutes are a written record of what happened during the meeting. They’re kept by an officer, or someone appointed by an officer. This duty often falls to a secretary, but can be delegated to anyone. While Illinois law leaves the minutes’ form and level of detail up to the company, as a general rule they should be detailed enough for future readers to understand what business was conducted at the meeting and any approved or rejected resolutions. Other helpful details to include are who was present at the meeting, what resolutions were proposed, and who voted which way on said resolutions.
To get you started, here’s a template for basic meeting minutes.
This in no way establishes an attorney-client relationship and you should not construe this template as legal advice, nor shall you rely on this template for your legal needs. We advise you to speak with an attorney should you have any questions or concerns about the usage of this template.
Final steps after the annual meeting is finished
The secretary, if applicable, should record the meeting minutes (this just means the minutes should be officially typed and described accurately) and all the shareholders should sign the document. The corporation should keep the signed minutes at their principal place of business, and should consider giving a copy to its attorney to hold with other corporate documents.