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“I’m the only member in my LLC, do I really have to hold meetings?”

March 28, 2016



You may think that having meeting minutes as a single member limited liability company seems arbitrary…but there are several reasons why you should formally document fundamental business transactions.

Chapter 101 of the Texas Business Organizations Code, which governs limited liability companies, does not explicitly require formalities such as meeting minutes. So why would you want to voluntarily take on additional paperwork?

The attractive feature of Texas limited liability companies is that they do not have to keep up with the corporate formalities required for a C-corporation. Yet, this same feature can be one of the biggest pitfalls of a single member LLC structure. Although the formation of a Texas LLC creates a limited liability barrier for its members, it is still subject to being “pierced” by creditors and potential plaintiffs. This dreaded outcome could occur if a court viewed the actions of the LLC – or lack thereof – as one in the same with its owner(s). Keeping regular meeting minutes can help avoid the appearance of a shell company and can provide you with evidence of proper treatment of a separate LLC should your actions be challenged.

Single member LLCs should have meeting minutes for any actions that its operating agreement calls for a vote. Often this includes decisions to add new members to the company, merge with another company or dissolve the company. Day-to-day operation and management decisions do not need to be recorded in formal meeting minutes. Furthermore, newly formed entities should have organizational meeting minutes where the operating agreement is formally adopted into the LLC and approved by its members.

We at Fears | Nachawati have experience working with small business owners to prepare internal governing documents and advise on related matters. Speak with one of us today to learn how to structure your meeting minutes, comply with notice requirements, what content should be included, and what other potential formalities your business should initiate.


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