Do I Need To Keep Minutes For My LLC?
Steven D. Goldberg, Esq. Wilmington, DE
sgoldberg@stevendgoldberg.com
http://www.stevendgoldberg.com
Contact me if you need assistance in forming/organizing a Delaware business entity or any matter of Delaware law. Delaware Forms and Publications are available at http://www.delawarellclaw.com
A corporation formed under the Delaware General Corporation Law (DGCL) is required to have an annual meeting of shareholders and at least an annual meeting of its board of directors. Minutes must be kept of the meetings and the minutes are available for inspection by shareholders and directors.
Unlike corporations the LLC Act does not mandate annual meetings of members or managers. While there is no statutory mandate for meetings, nevertheless should an LLC hold meetings of its members and keep minutes of those meetings? The answer in my view is yes.
As the LLC organizes there should be a record of the decisions made, similar to the organizational minutes of a corporation. The minutes will reflect the decisions of the members as to who will be responsible for the day to day management of the company, if the company is to have officers, an identification of the offices and who holds those offices, decisions as to banking, borrowing and the admission of members among other major decisions.
Under the LLC Act, §18-305, subject to reasonable standards as may be set forth in the company agreement, the records of the LLC are available for inspection by members and managers, subject to the right of the manager to keep confidential any information which the manager reasonably believes to be in the nature of trade secrets or which could damage the business of the LLC.
Whether the LLC is member managed or manager managed, the members have a function in the company, though that function may be limited in the case of a manager managed LLC. When members do meet there should be a person to whom the responsiblity to keep the minutes is delegated. Minutes form an important record of the deliberations of the members and provide a historical record of the company’s business decisions. It is my view that even in the case of a sole manager, that manager should prepare minutes to reflect major decisions, such as the admission of members if the manger is responsible for admissions and other matters such as borrowing.
Just as the sole manager should keep minutes to reflect his or her decisions, the sole member of a LLC should likewise keep minutes to reflect his or her decisions in the management of the LLC.
