Family owned corporations are subject to the same statutory requirements regarding entity governance as non-family owned businesses. Thus, in order to fully comply with the applicable statute for the state where the business is incorporated, a family business should pay attention to all provisions that require annual or other ongoing action by the company. These include:
- Holding annual shareholder meetings
- Holding formal elections of directors at shareholder meetings,
- Documenting actions taken by the unanimous consent of the directors without a meeting
- Maintaining complete records of the company’s operations and finances
Many companies also have detailed provisions in their by-laws that spell out additional duties of directors and officers, along with shareholders’ rights and responsibilities.
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