Washington corporations are, in general, required to have annual shareholder meetings. That’s right folks, it’s not optional. RCW 23B.07.010 states in pertinent part, “[A] corporation shall hold a meeting of shareholders annually . . . .” That is not permissive language; in legislation, a “shall” means something is not optional.
I would be quite wealthy if I received a dollar each time a client has said to me, “But, I own my business by myself! How can I meet with myself? That’s crazy!” Our firm represents many corporations owned by only one shareholder, so I hear this remark time and time again.
I’ve checked the statute and looked for an exception stating, “However, if you are the sole shareholder, you might be perceived as insane if you scheduled a meeting with yourself, showed up, and reported to yourself on various business activities. In order to preserve your self-dignity, annual meetings are not required if you’re on your own.” Try as I might, I can’t find this language in the statute.
So, you have to meet with yourself – there’s no other option. What does that look like? If you’re a client of our firm, we’ll be happy to provide some guidelines about what your annual shareholder meeting needs to look like. You’ll want to report on your corporation’s major activities throughout the year and, hopefully, the financial successes achieved. You’ll also want to make sure the corporation elects its Board of Directors.
Our firm prepares two legal documents in relation to the meeting: “Call and Waiver of Notice of Annual Meeting of Shareholders” and “Minutes of Annual Meeting of Shareholders.” We generally meet with our clients to conduct these annual meetings. This allows our clients to retain their dignity since they are not meeting “with themselves,” they are meeting with their lawyer! These meetings also provide a helpful opportunity to briefly check in with us, let us know how your business is doing, and if there’s anything we can do to help. If an in-person meeting is not possible, then we prepare a corporate resolution to send to our clients for signature. These corporate legal documents are stored in the corporate minute book, which must be kept in the corporation’s principal place of business pursuant to RCW 23B.16.010.
So next time you find that you’re having a conversation with yourself, perhaps your subconscious brain is reminding you that it’s time to call us to schedule your annual corporate shareholders meeting!
Photo credit: Unique Hotels on Flickr