06 36 MEMORANDUM REGARDING CORPORATION OPERATIONS (SAMPLE FORM)

• Jurisdiction: Arkansas
• Library: Arkansas Form Book - Complete (2023 Ed.)

06-36 MEMORANDUM REGARDING CORPORATION OPERATIONS (SAMPLE FORM)

MEMORANDUM

TO: Officers and Directors

FROM: [Name of Law Firm]

DATE: [date]

RE: [corporate name]

The legal formalities of incorporation of your corporation have been finalized. Your corporate record book [has been ordered] [is enclosed]. Your articles of incorporation have been filed and your bylaws for the corporation and organizational minutes have been finalized. The corporate form may seem to be complex. To make it easier and more understandable for you, your employees and your advisors, we urge you to read this memorandum and the contents of your minute book carefully, and retain them as your permanent corporate records.

If you have not already done so, you should contact your accountant immediately to ensure that all tax or regulatory filings or applications are submitted and that any elections regarding tax status are made in a timely manner.

As a continuing matter of sound practice, your accountant and your attorney should meet with you at least annually, preferably during the last month of each fiscal year, to make certain that all required corporate steps are taken.

1. Lawful Activity:

Referring to your articles of incorporation, you will see that the primary purpose of your corporation is [the business purpose set forth in the articles] [as well as] [any kind of business permitted by law]. However, you should not engage in a totally unrelated business without checking with your attorney. If you have any questions regarding your business in the corporate form, do not hesitate to call.

2. Accounting:

It is the responsibility of the officers and directors of the corporation to make certain that accounting practices and auditing procedures customarily followed by similar businesses are observed in proper and timely fashion by the corporation. Accordingly, your accountant, whom we have fully advised regarding the initial steps that have been taken to form your corporation, should be kept currently and consistently informed regarding all of your corporation's business activities. You will be receiving tax forms from the Internal Revenue Service and completion of such forms should be coordinated with your accountant. The employer identification number and all tax forms must be delivered promptly to your accountant. Your accountant should prepare the applications for state sales tax numbers (if applicable) and local business and professional license taxes as required for your new corporation. Your accountant is familiar with the state, federal and local tax requirements respecting the reporting of all transactions by your corporation and will assist you to meet all record-keeping requirements imposed upon your business by reason of its incorporation. For example, your accountant will set up a new set of books and keep you advised of the necessity for your corporation to file with any applicable regulatory agency annual or other current reports. Also, Ark. Code Ann. § 4-27-1620 requires the corporation to provide annual financial statements to all shareholders within 120 days of the end of your fiscal year. You should consult with your accountant to comply with that requirement.

Your accountant may prepare necessary budget and cash forecast data to enable you to project your corporation's cash flow requirements. Initially, he or she will resolve questions regarding tax...