Your Company Binder: What is Missing Can Cost You Big Time

What You Need to Know to Keep Your Protection

Do you know where your Corporate Book is right now? Some of you may wonder where it is, and others may wonder WHAT it is?

Your Company Book is where you keep the legal records of your business. It is where you record the history of your company and document the actions taken by its directors, officers or managers.

As a business owner you are focused on your Business: customers, service, products, cost, profits, bank account balances, just to name a few, maybe not your Company Book. When you set up your company, you probably checked it off you to do list, and were happy be done with it and be able to move on to the things that make money. However a key item to think about is keeping up with your Company Book or Binder.

3 Questions to ask yourself today:

 

1) You may have two or more companies that do business with one another. Did the company buy or sell any assets? to third parties or to related companies? Did you document these transactions in your company minutes? Are you having meetings to approve your companies actions, or do you just do it?

2) Throughout the year(s) you may have paid for certain personal items with your business or perhaps paid for business items from your personal account or another business account. Your company may have leased a property from you.

3) Have you asked yourself “What’s in your Company Binder?”

 

You can avoid this potential disaster by keeping up with your Entity Binder. It is important to document your company activities (and in some cases non-activities) in a proper, coordinated and complete manner. Rely on a professional familiar with the importance of Entity Maintenance, it often involves more than minutes to properly document a transaction, without leaving holes that can be attacked or challenged.

Entity Maintenance involves documentation of the business of your entity. In law “if it is not in writing it did not happen” can cause problems and increase pressure when things go wrong. In a lawsuit or an IRS audit, one of the first things you will be asked for is your Entity Binder. Not having it up to date will create cracks in the armor of the Asset Protection Entity. When you don’t have proper documentation to substantiate the business activities, you leave it up to interpretation, the interpretation of a jury or an IRS agent. The potential loss could be financially catastrophic.

You can work on this yourself, or you can hire a qualified law firm to handle these documents for you. I am ready and able to assist you in coordinating your minutes and other corresponding documents to insure your business continues to provide you protection.

TIP OF THE MONTH

Document your business activities, in your entity binder, but also remember to create the underlying agreements between companies and individuals. If you lease property to your business, be sure you have a lease agreement in place. If one company borrows money from another, be sure that you have a promissory note with interest charged. And of course record these transactions in each corresponding entity. When you have a thorough set of documents, you will have a stronger shield of protection. Save yourself the hassle and be assured the job is done right, contact us today!

If you are interested in updating your company binder, forming a new entity or to review your business structure, or have any other estate planning or asset protection questions, we are available in person, by appointment or by Zoom. In South Texas, call us at 956-791-5422 and in Central Texas call us at 830-302-4577. The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Common Questions About Small Business Law

Launching and running a business requires key legal steps that safeguard both the owners and the company’s operations. Business formation documents such as articles of incorporation and operating agreements play a key role in setting a foundation for structure and compliance. These documents define how a company functions, how decisions are made, and what happens if ownership changes. Seeking guidance from our New Braunfels, TX small business lawyer can help business owners take the right approach from the beginning.

What Is The Difference Between Articles Of Incorporation And An Operating Agreement?

Articles of incorporation are filed with the state to legally form a corporation, while an operating agreement is used primarily by LLCs to outline internal management rules. The articles of incorporation act as a public record confirming the existence of a business. In contrast, an operating agreement establishes internal policies, ownership percentages, and responsibilities among members. Having both documents in place helps maintain compliance and provides a clear roadmap for how the business operates and makes decisions.

Why Do Small Businesses Need Articles Of Incorporation?

Our New Braunfels small business lawyer shares that articles of incorporation provide legal recognition and allow a business to operate as a separate entity from its owners. This separation helps limit personal liability and provides access to corporate benefits such as tax advantages and potential investment opportunities. Without this filing, a business owner could be personally responsible for company debts or legal actions. These documents also signal credibility to clients and investors by showing that the business is officially registered with the state.

How Do I File Articles Of Incorporation For My Small Business?

Filing articles of incorporation typically begins by submitting the required documents to the state’s Secretary of State office. Each state has specific rules for corporate filings, and fees may vary depending on the business type and location. We recommend reviewing the state’s online filing portal for details on required forms and costs. Business owners may also work with our business formation attorney to prepare these documents accurately and confirm that the business name, structure, and purpose meet state requirements.

What Information Is Required In The Articles Of Incorporation?

Articles of incorporation typically list the company’s name, address, purpose, number of authorized shares, and the names of its directors or officers. Some states also require a registered agent who accepts legal documents on behalf of the business. Accurate and complete information helps prevent filing delays and legal challenges. Consulting our corporate attorney during this process can help confirm that all necessary information complies with state laws and supports the long-term goals of the business.

Do All States Require An Operating Agreement For LLCs?

Not all states legally require LLCs to have an operating agreement, but it is always recommended. Even in states that do not mandate it, having this document helps define how the business will be managed, how profits will be distributed, and how disputes will be resolved. Our business law attorney can draft an operating agreement that aligns with both state regulations and the business’s internal goals, reducing the risk of conflict between members in the future.

Building Strong Legal Foundations For Small Businesses

Partnering with our New Braunfels small business lawyer helps business owners build a solid legal structure and stay compliant as their companies grow and evolve.The firm’s team assists with business formation, contract drafting, and internal governance for LLCs and corporations across Central Texas. Their office, located near the Hays County Courthouse, regularly helps local entrepreneurs form businesses that reflect their goals and meet state requirements. For reliable guidance in creating or updating your company’s legal documents, reach out to The J M Dickerson Law Firm today to learn more about available services and support.