Annual meetings are required by law for registered corporations but not for limited liability companies (LLCs). Even so, as an LLC owner, you might still want to hold an annual meeting to make sure your fellow owners are all on the same page and to get many aspects of your business in order.
Annual meeting requirements
Corporation bylaws, and oftentimes LLC bylaws, dictate meeting procedures such as how many people must be present, whether they must be in person or by proxy, how notice must be provided to shareholders or members, and how voting occurs.
It is critical to abide by these provisions or your meeting could fail to meet legal requirements for corporations or simply run afoul of your own LLC bylaws. It is also important to plan and clearly communicate an agenda to members in advance of the meeting.
The Securities and Exchange Commission (SEC) also requires publicly traded companies to provide notice and a proxy statement to shareholders to inform them of issues to be addressed at the meeting.
The company must also file the proxy statement with the SEC.
Annual meeting topics
While there are countless subjects your meeting may cover, the following are some basic, overarching topics commonly discussed during annual meetings, though priorities may vary based on your specific business.
1. Administrative tasks
Any changes to your company's bylaws should be presented, discussed, and voted on at the annual meeting. For example, you may want to discuss the company's dividend payout policy, particularly if you haven't yet established one or if you think it needs amending. You can also make sure that other administrative tasks, such as the filing of the annual report, are on track.
2. Board of directors
If there are potential leadership changes on the table, the annual meeting is the place to take care of such tasks as voting for the board of directors or electing new board members. Voting procedures must comply with your bylaws, otherwise, decisions may be invalid.
3. Values and purpose
Veering away from the purely bureaucratic, the annual meeting is also an ideal time to discuss the overarching themes that define your business, such as civic responsibility, accountability, or innovation.
If you're running an LLC, you may even want to ask members to come prepared with ideas on how to incorporate tangible actions into the company's practices that reflect its core values and purpose.
4. Goals and strategy
Short-term and long-term goals provide a solid foundation for the annual meeting by giving investors and members a clear idea of where the company is headed, such as new products or initiatives on the horizon.
Common discussions include where the business hopes to be a year from now or even more, and how you plan to get there.
Communicating these goals as well as your planned path and strategies on how to reach them can instill confidence in shareholders and members.
5. Sales and results
There's nothing more tangible you can offer shareholders and LLC members than concrete numbers on your business's performance.
Sales numbers are an obvious choice, but there are many different measures of a company's success, including an increase in the number of employees, the number of new clients or customers gained, and cash flow.
If planned properly, an annual meeting can play an extremely important role in keeping your business running smoothly.
For more tips on how you can use this time most effectively, you may wish to speak to an experienced professional or an attorney who can help you formulate your agenda.
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