The Harvard law blog on corporate governance usually includes posts on such lofty topics as activist shareholders, corporate takeovers, the latest SEC regulations for public companies and Delaware law updates.  This week, there was a refreshing post on family-owned businesses and the question of whether they ought to implement boards (of directors for corporations, of managers for LLCs).  Some of what they post assumes businesses that are large and complex, even if not publicly held.  But much is relevant for small businesses as well.  For example, we think the following excerpt is on point: Having a board does require certain formalities—like preparing…
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It’s a good question.  The traditional answer was that corporations needed to keep minutes as a matter of law in order to document decision-making by the Board of Directors.  The idea was that, if a corporation couldn’t show that it was acting like a real company, and not some puppet, alter-ego, of its majority shareholder, the corporate veil could be pierced, and its owners could be held personally responsible for all the liabilities of the corporation.  As such, the corporate formalities of having a board of directors that made key management decisions for the company, were critical, and the way to evidence…
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