Strategic Business Planning
Preserving The Liability Protection Of Your Corporation
Gary L. Brown, Attorney
BROWN & ASSOCIATES
Attorneys & Counselors at Law, PLLC
Enid, OK
Under Oklahoma Law, a Corporation is a legal entity separate
from its stockholders, doing business in its own name. As a result, the stockholders
have limited liability. A corporation's minute book should be reviewed and
updated periodically by an attorney to be certain the Bylaws and other agreements
are being complied with, that changes which have taken place over the years
have not affected the Bylaws, and that the records on file with the Secretary
of State and Oklahoma Tax Commission are up to date. To preserve your limited
liability you should:
· Comply with the formalities of running a corporation. Follow provisions
of the corporation's Articles of Incorporation and Bylaws, hold meetings of
the stockholders and Directors as required, and keep up-to-date minutes of
annual and special meetings. Any major changes affecting the corporation (such
as borrowing funds; opening new bank accounts; entering into contracts, purchases
or leases of real property; selling stock; changing Officers or Directors;
changing the number of Directors authorized to serve per the Bylaws; issuing
stockholder dividends, Director salaries or employee bonuses; changing the
name or address of the Registered Agent or Registered Address on file with
the Secretary of State's office) should be reflected in the minutes.
· The Bylaws of many closely held corporations allow for waiver of formal
annual meetings, and in lieu thereof, permit execution of "Annual Actions
of the Shareholders and Directors". These Annual Actions should provide for
the election of Directors by the Shareholders, election of Officers by the
Directors, approval of the financial statement, and approval of other actions
normally taken at the annual meetings.
· Take care in handling corporate funds and transactions to keep them completely
separate from your personal affairs.
· Always use the full, complete and correct corporate name on letters, checks,
signs, advertisements and other printed material. Ensure all corporate documents
are signed properly by the corporate Officers. If using a trade name, be certain
it is properly recorded with the Secretary of State's office and that the
corporate status is properly reflected when using the trade name.
· If you are conducting business in a state other than your state of original
qualification, you should check the requirements of that state with regard
to doing business, you may need to qualify in that state. Your attorney can
assist you in determining those requirements.