You have just formed your business and filed all the necessary documents with the state. Various paperwork is coming in the mail and via email, and you are wondering what you should do with it so you don’t lose anything. A corporate kit is a repository for all essential documentation and paperwork for your new corporation or limited liability company (LLC). Often called a minute book, company kit, corporate book, or legal binder, the corporate kit is essential for diligent record keeping.
What does a corporate kit include?
A Corporate Kit is a binder containing essential items for a company’s required maintenance and administration. Once your company is formed, you must comply with corporate formalities. These formalities can include holding initial and annual meetings of directors and shareholders/members, adopting bylaws/operating agreements, and issuing shares of stock/membership certificates.
Corporate kits are state-specific. This is important because not all states have the same requirements. Depending on the state, the content of a corporate kit may be detailed in the state’s Business Corporation Law. For example, the New York Department of State explains,
The corporation must keep correct and complete books and records of account and must keep minutes of the proceedings of its shareholders, board of directors, and executive committee, if any. The corporation must also keep a record containing the names and addresses of all shareholders, the number and class of shares held by each, and the dates when they respectively became the owners of record thereof. (See Section 624 of the Business Corporation Law.)
In addition, a meeting of shareholders must be held annually for the election of directors and the transaction of other business on a date fixed by or under the by-laws. (See Section 602 of the Business Corporation Law.)
Please note that by-laws and corporate books and records are not filed with the Department of State or any other state agency. These are internal documents maintained by the corporation. The Department of State cannot provide legal advice regarding the preparation of these documents.
What should be in my corporate kit?
Many businesses use a corporate kit to store necessary company documentation. The kits are usually a 3-ring binder with several standard components depending on whether your company is an LLC or a corporation. The key elements of a corporate kit are as follows:
- Meeting minutes. All corporations are required to have a record of their initial and annual meeting minutes. The minutes are all the notes from official company meetings. While LLCs are not required to complete annual minutes, it is strongly suggested that they do their initial minutes. Usually completed by the corporate secretary, any form of record keeping that accurately stores important documentation is acceptable. In fact, records may even be kept electronically.
- Copy of filed formation documents. This section of the kit will house the filed Certificate of Incorporation or the Articles of Organization for an LLC.
- LLC operating agreement: the Operating Agreement assists business owners in laying out their LLC’s ownership, membership, management, and daily company activities. LLC operating agreements are considered to be binding contracts among the members of an LLC. In many states, such as Delaware, neither the bylaws nor an LLC operating agreement needs to be disclosed to the Delaware Division of Corporations.
- Corporate bylaws. (com) Corporate Bylaws, also known as company or business bylaws, are a set of legally binding rules that a corporation writes to guide its internal management. Corporate Bylaws outline company policies. Bylaws may specify:
- Daily procedures
- Location and time of the yearly shareholder meeting
- Company structure
- The officers and company ownership
- Corporate resolutions: Corporate resolutions encompass all managerial choices undertaken on behalf of the company. An illustration of such decisions includes a bank resolution, typically obligatory before initiating a corporate bank account.
- Stock/membership certificates. A stock certificate represents a shareholder’s ownership in a corporation or a member’s ownership in an LLC.
- Transfer ledger. The ledger houses future changes to ownership or membership
- Corporate seal. A corporate seal typically includes the name of the entity or LLC, the state, and the year of formation.
What is an E-kit or digital kit?
Electronic or digital corporate kits include a PDF of the corporate seal, stock or membership certificates emailed in PDF format, and E-Bylaws and E-Operating Agreements. E-kits can be combined with the physical kit, and binders can be ordered to house any ancillary documents such as:
- The IRS letter for Federal ID Number
- Banking documents
- Business licenses
Options for cloud storage are available with some corporate kit suppliers. The pandemic sparked the migration to electronic document storage when so much of the workforce was remote and needed access.
The difference between an e-kit and the physical corporate book is just what you would imagine- electronic vs. physical storage.
Does an LLC need a corporate book or just a Corp?
An LLC is not required to keep a corporate kit. Still, a central storage location for all documentation is critical when matters arise, such as funding opportunities, litigation, or selling the LLC. The primary documentation housed in the kit should be the formation documents and the operating agreement. Other items include:
- Meeting minutes
- Membership Certificates
- Membership Listing
- IRS forms and documents
- A seal is not necessary but is often included
Where do I store my corporate kit?
Many entities store corporate kits with their attorney or accountant. For many solopreneurs, the kit is housed in their offices. Remember, the most important thing is knowing its whereabouts and keeping all documentation current.
What if I don’t want a bulky binder?
No worries! We have various solutions for any business type or size. Contact us to speak with a specialist about forming an entity and ordering a corporate kit.