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What is a corporate book and why do I need one?
March 25, 2013
MyTechnologyLawyer
Web Edition
Your "Corporate Book" should evidence the activities of the corporation as a separate legal entity. The legal distinction between you and the corporation enables you to take advantage of the "corporate veil" in avoiding personal liability for the legal obligations of the Corporation.
Your Corporate Book should contain a copy of your Articles of Incorporation, By-Laws, Stock Ledger and corporate resolutions. Corporate resolutions should memorialize action in electing Directors, Officers, Committee Members and selecting Bankers, Accountants, and Lawyers for the corporation. Resolutions approving dividends, distributions, financial reports and stock buy-sell agreements should be included. 401K plans and office leases are also commonly adopted in Board resolutions memorialized in the Corporate Book.
The failure to maintain an adequate corporate record introduces ambiguity in corporate responsibility and can lead to compromises in your relationship with shareholders, directors and creditors as well as the Internal Revenue Service. By documenting these activities you will clarify distinction between your personal legal obligations and those of the corporation.
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