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Annual Minutes: The Importance of Corporate Formalities

While the failure to file the required Annual Report with the Division of Corporations will lead to administrative dissolution of the corporation, failure to keep at least Annual Minutes is a little less cut and dried. Annual Minutes are not required to be filed with the Division of Corporations. There is no penalty for failure to complete and maintain Annual Minutes.

Yet there is every reason to document corporate action in the form of minutes which should be maintained by the corporation. Creditors will always seek to attach individual liability for debts to shareholders.

If corporate formalities, such as completing your Organizational Minutes and keeping regular Minutes of Meetings, have not been followed then you have created a red flag. Though Florida Corporate law requires that there be some fraud in forming the corporation or actions by individual shareholders to defraud creditors through the corporation, if you do not follow corporate formalities, chances are allegations of fraud in running the corporation as your personal piggy bank won’t be far behind.

In addition, failure to properly document loans made to the corporation could result in the IRS re-characterizing loans as capital contributions greatly changing your tax liability for capital gains should you seek to later sell your company.

The great thing about Annual Minutes is you can address all actions taken for which you did not have separate meetings. Here is a checklist of certain items, though not exhaustive, that should make it to your Corporate Minute Book:

1. Election of Directors and appointment of officers
2. Review of corporate financial statements
3. Changes in salaries of officers
4. Changes in compensation of managerial level corporate employees
5. Amendment of Articles of Incorporation
6. Adoption of employee benefit plans
7. Purchase, sale, or lease of real property or equipment
8. Approval of corporate loans taken or made
9. Authorizing additional stock or approving the issuance of authorized stock
10. Indemnification of Directors, officers, employees or agents

Confidentiality Non-Circumvention Agreement: Business Lawyer Clearwater FL

There are times when a business or corporation must keep trade secrets and other confidential information secure even while not necessarily ever doing business with whom they are considering. Many of my clients face this chicken and egg question which I assist with in my capacity as their Business Lawyer Clearwater FL. Without a Confidentiality Agreement or some sort of Non-Disclosure Agreement, it is hard to begin discussions with future business partners or vendors. Your Business Lawyer Clearwater FL should make sure your Confidentiality Agreement or NDA defines Confidential Information and also defines what is not Confidential Information.

Business Lawyer Clearwater FL Reviews Confidentiality and Non-Circumvention Agreement Clauses

However, you also want to make sure you restrict the recipient of your confidential information from benefiting from the direct or indirect use or exposure you give them to the Confidential Information. Discuss specifics of your deal with your Business Lawyer Clearwater FL. This allows you to not only sue for the breach of the agreement if necessary, but also to allege that any benefit obtained by the recipient through use of your Proprietary and Confidential Information should be turned over to you for the benefit of your business or company.

confidentiality and non-circumvention agreementThe first two provisions below are the typical provisions in a Confidentiality Agreement. However, make sure the Non-Circumvention provision below is part of your NDA or Confidentiality Agreement. Questions? Contact Business Lawyer Clearwater FL Nickolas Ekonomides.

Confidential Information

As used herein, “Confidential Information” shall mean all information, whether in written, oral, electronic or other form, furnished or disclosed on or after the date hereof by the Company to the Recipient, and specifically includes, but is not limited to, all business and financial information, assets, marketing and strategic plans, analysis, projections, reports, technologies, processes and operations, compilations, forecasts, studies, lists, summaries, notes, data, legal and regulatory permitting strategic analysis and plans relative to state and local law, all terms and conditions included in any and all drafts of any agreement with respect to the Business Opportunity, all customers, employees, suppliers, vendors, professionals involved with the Business Opportunity (“Contact Persons”), and all other documents and materials concerning the Company and its affiliates, including the terms of this Agreement, and any prices, fees, financing arrangements, and schedules hereto. Confidential Information shall also include all information related to the Business Opportunity provided by the Company to the Recipient prior to the signing of this Agreement.

Non-Confidential Information

Confidential Information shall not include any of the following:
(a) such information in the public domain at the time of the disclosure, or which subsequently comes within the public domain through no fault of the Recipient;
(b) such information which was in the possession of the Recipient at the time of disclosure that was not acquired, directly or indirectly, from the Company;
(c) such information which the Recipient acquired from a third party who did not require the Recipient to hold the same in confidence and who did not acquire such information through breach of this Agreement; or
d) Information independently developed by the Recipient without use of any Confidential Information.


The Recipient shall not at any time prior to the expiration of three (3) years from the date of this Agreement, without the prior written consent of the Company, which consent the Company may withhold in its sole discretion, (a) attempt in any manner to deal directly or indirectly in any manner with any of the Contact Persons or other individuals or companies related to the Business Opportunity including by having any part of or deriving any benefit from the Business Opportunity or any aspect thereof, or (b) by-pass, compete, avoid, circumvent, or attempt to circumvent the Company relative to Business Opportunity including by utilizing any of the Confidential Information or by otherwise exploiting or deriving any benefit from the Confidential Information.

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The information contained in this website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should consult with an attorney before using any information from or any Legal Forms provided on this website. Read the entire Disclaimer.

Nickolas C. Ekonomides is licensed in Florida with main office Clearwater.