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Smart Way #4: Make sure you properly convene and document shareholder/member meetings.
At least one shareholder/member meeting must be held annually to elect board members. Before meeting, make sure you check the company's bylaws. They may require that you send timely notices, waivers and proxy statements. The bylaws may require that you prepare and keep proper agendas -- and that you propose, vote on, record and sign resolutions. Even if you are the sole shareholder in the business, you must still send meeting notices, hold meetings, and elect board members. This shows that you are drawing a clear distinction between your personal identity and the identity of your business entity. Failure to follow corporate formalities by having proper shareholder meetings is a leading factor in piercing the veil and holding owners personally liable.
