Once incorporators establish a new business, the named directors must ensure that it maintains its legal status. Depending on the business form, certain legal formalities must be followed for this purpose. Once incorporated, an ongoing business’s obligations include:
– Obtaining federal and state tax identification numbers for the business and filing needed tax returns annually;
– Issuing shares of stock as required by the articles of incorporation and federal securities law;
– Establishing and maintaining corporate books and records, including accounting ledgers, shareholder records, and all corporate minutes;
– Calling and conducting an initial meeting of the board of directors or the shareholders, as required in the articles of incorporation;
– Conforming all decisions and procedures as set forth by the articles of incorporation;
– Recording all actions and decisions of the board of directors in the corporate minutes; and
– Maintaining annual registration with the state government as required by law.
Additionally, some businesses must comply with licensing requirements or regulatory standards to preserve their status. These businesses may need to maintain further records or use special procedures or equipment based on rules for their specific industries.
Most concerning, a failure to abide by corporate obligations and formalities can result in personal liability for directors, officers, or shareholders for business obligations and debts. Because of these harsh consequences the specific legal requirements vary depending on the business