Another area to consider is the amount of earnings your business retains instead of distributing the funds as taxable dividends. A penalty can apply to retained earnings over a certain limit unless the needs of your business justify the amount. Corporate minutes can help by spelling out the reasons your company needs to retain funds – for example, to purchase assets or for working capital.
Does your company have a
tax-qualified retirement or a stock option plan? The minutes should show
decisions by the board when adopting or modifying the plan. Other information
to include: annual decisions on the contribution percentage made to
profit-sharing plans, and the amount of fringe benefits, such as medical
reimbursement accounts.
If your corporate minutes need
updating, we suggest you contact your attorney.
