Does a Single-Member LLC Need to Keep Minutes?
If you’ve seen my previous video about the risks of a single-member LLC, you’ll know that I recommend that you keep record and minutes of decisions that you make as a single member in a single-member LLC. And people often get confused about this because it seems like a weird concept to be the only owner and the only person involved in a business and making the decisions, yet still have to have meetings with yourself and keep record of those same decisions that you are making. Who are these records really for, anyway?
People often wonder: Do I really need to have meetings and minutes of those meetings if I am in a single-member LLC? And, really, the answer is Yes. You do need to.
Now whether or not it is actually required will differ on what state you are in. In Colorado, LLCs are not required, in general, to keep minutes or meeting minutes or record of decision, unless, of course, the Operating Agreement requires it. If the operating agreement states that certain decisions or actions need to be consented to in writing, then yes, in that instance you are definitely required to have those decisions or actions in writing.
There are a few actions, though, that Colorado does require that each member consent to. For example, with something like amending the Articles of Organization, statutorily, each member must consent to amending the articles of organization. So even if you are just one member, you are still a member, so you need to document your consent. That can be in the form of meeting minutes, or a document showing your consent in lieu of a meeting (since you’re the only owner and it would be weird to have a meeting with yourself).
So in order to help protect your personal liability, as a single member in a single-member LLC, it is important to document your decisions and to document things that you decide to do that affect the business because that is evidence of you running a real, actual business. If you had business partners, you would probably be keeping record of these things and you would probably be having meetings and keeping minutes of those meetings. So just because you are the single member doesn’t mean you shouldn’t have to keep those kinds of records as well. If for nothing else than evidentiary purposes of you running a real, legitimate business to protect your own personal liability, that is reason enough to keep adequate documentation of transactions and decisions that you make for the business.
I know it can be confusing and kind of strange, but basically, to summarize, just keep written records of important things you do with your business. Easy, right? 🙂