The 3 Most Important Corporate Formalities

Although filing as a corporation or LLC helps limit your personal liability, merely incorporating by registering your business with the Ohio Secretary of State isn’t the only requirement you need to follow to protect yourself. Legal requirements – officially called “corporate formalities” – are the rules set by the State of Ohio that a business must follow to become a formal legal entity. Failure to observe corporate formalities can lead to significant legal issues, including potential allegations by others to “pierce the corporate veil,” a legal claim recognized by Ohio courts.

All Ohio corporations and LLCs – regardless of size, type of entity, or age – are required to follow corporate formalities. A single-owner LLC is just as responsible as a billion dollar corporation in the eyes of the law.

The 3 most important corporate formalities every Ohio corporation must follow:

1. All companies must have corporate governance documents. i.e., bylaws (for corporations) or operating agreements (LLCs).
2. All corporations must hold annual meetings with their board of directors and all LLCs should hold annual meetings.
3. All corporations must record written minutes of these annual meetings.  LLCs should record written minutes.

There are additional corporate formalities with which your corporation or LLC should comply; however, they often depend on your company’s situation.

We can help!  Wells Law can assist with preparation of your operating agreement, annual minutes, and corporate book. Contact us today!