Key legal, tax and financial decisions should be acted on by the board of directors and documented in the minutes at least annually. Key decisions include: the issuance of stock to new or existing shareholders, the purchase of real property, the approval of a long-term lease, the authorization of a significant loan amount or substantial line of credit, the adoption of a retirement plan, health plan, etc. These, and other key decisions, should also be backed by the supporting documentation. Documentation of business decisions within your minutes helps to protect the limited liability of your business and insulate you from personal liability. If you fail to pay at least minimal attention to the formalities of having a separate business entity, you may lose the limited liability protection of your corporate status. A "paper trail" can be important if disputes arise. Minutes provide solid documentation in the event key decisions are questioned or reviewed later by the IRS, shareholders, creditors, or the courts. A minimum requirement under North Carolina law is that corporations must have an annual meeting of its stockholders, with the minutes documented to maintain a valid corporate status.
It is very important that loans between the shareholders and the Company are evidenced by a written promissory note with terms and a stated interest rate. Without such documentation, the IRS has disallowed the use of such loans as basis for deducting losses. Please be sure to prepare notes for all new loans and old notes are cancelled when paid.