Corporate Minutes and Avoiding Liability

Often, disputes between shareholders, partners or members of a LLC start slowly and build over time.  During the interim business continues and each party has a different view of how “older” corporate actions affect the company and each shareholder’s rights.  When a problem boils over into a lawsuit the facts at issue often date back several years.  Managers, officers and directors should expect that their decisions will be under scrutiny and protect themselves accordingly.  One of the simplest ways to do so is to keep clear, thorough and accurate minutes.  Whether for an LLC, a corporation or a partnership, the individuals making decisions should document their meetings, votes taken, discussions which occur and other corporate actions.  This applies to both formal and informal meetings.

Further, a common mistake is to allow a director, officer or member to remain silent during an important discussion.  Whoever is running the meeting should encourage each party present to put their thoughts on the record and ensure that such contributions are recorded (via written minutes or an audio recording).  These relatively simple changes can prevent disagreements from festering, and protect the company and the individuals responsible for managing the company.  Our firm’s attorneys practice business litigation, fraud litigation, shareholder litigation and assist businesses of all types in avoiding lawsuits.


Written by

Eric Hawkins received his B.A. from the University of Arizona, and his J.D. from the University of Arizona College of Law. Eric has been with the firm since his admission to the bar in 2006, and became a partner in 2011. Eric practices primarily in the areas of Construction law, Employment law, and Business law. This work includes contract preparation and review, partnership agreements, construction collection claims, Registrar of Contractors matters and disputes both in and out of the courtroom. Over the past five years Eric has successfully litigated several cases involving business fraud, construction defects, and employment disputes. Eric has worked with the Alliance of Construction Trades in Tucson, and represents subcontractors and suppliers in the organization. Eric has written numerous articles on various issues including indemnification, construction contracts, insurance law and employment practices.