Last week we talked about ensuring ongoing communication to prevent conflict amongst the ownership group. Given the pandemic and perhaps with owners in different cities, states or countries, meeting face-to-face is not always possible. Is there a way to ensure proper documentation of actions taken by the business without having sit-down meetings memorialized in meeting minutes? Yes.
A written action is a document that is as effective from a decision-making standpoint as a decision made during a meeting (members, managers, shareholders or directors). Written actions are authorized by statute and most often also authorized by the business’ internal governing document (operating agreement or shareholder agreement). The purpose of a written action is to formally document a decision that was made by the business. This ensures proper record-keeping by the business, ensures that the decision-makers are on the same page, and ensures that the decision was made by the appropriate decision-makers. Written actions are an effective tool when those in control of the business are unable to meet face-to-face and need to make a decision for the business.
Again, communication is key to ensuring the ongoing viability of your business. Utilizing written actions can be an effective way to ensure that such communication takes place and is documented.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney. All information contained in links are the property of the linked site.