In these turbulent economic times, there is a lot of talk about “getting back to basics.” One major insurer has even made this theme the focus of a national marketing pitch, implying that there is no better way for consumers to get back to their basic needs than to buy insurance from this company rather than its competitors. But what does it mean to get back to basics? Obviously, the basics are contextual and to a great extent, subjective.
In the corporate realm, however, there is perhaps nothing more basic than the need to observe certain corporate formalities. Like death and taxes, corporate formalities are an unavoidable fact of every company’s governance process. As we all know, failure to observe certain corporate formalities can result in some unwelcome problems such as disregard of the corporate veil and shareholder liability for corporate obligations. Beyond the obvious corporate formalities, such as holding board meetings and properly executing contracts in the name of the company, taking care of some basic corporate and legal housekeeping is a great way to build a foundation toward “getting back to basics” and ensuring that your company is observing the essential corporate formalities.
Here, then, as a reminder of the basics that every company should be thinking about, is a general checklist for annual corporate maintenance (click the "Download PDF" link to the left to view this checklist). Please note that this checklist has been generalized to cover corporations, limited liability companies and other types of entities, and should generally apply whether your company is an insurer, a broker, an agency or other intermediary in the insurance industry. This list is not intended to be exhaustive but instead should be used as a catalyst for thought and discussion of the corporate maintenance requirements of your company.
Brooks Binder is a Partner in the firm’s Insurance and Reinsurance, Corporate and Securities Practices. He concentrates in the areas of mergers and acquisitions, strategic investments, recapitalizations, venture capital financings, leveraged buyouts, debt offerings including mezzanine loans, equipment leasing and other commercial lending transactions. Brooks received his bachelor’s degree from the University of North Carolina at Chapel Hill and his law degree from Emory University.