When was the last shareholders meeting you went to? If your business is incorporated, the answer should be "In January (or April, or July) this year."

Although it can be easy to procrastinate about having a shareholder meeting, is not difficult and takes up very little time. Annual shareholder meetings even can be fun, unless you hold the meeting in the coffee area of your office at 6:30 a.m. every January 1st.!

Before you do anything about a meeting of shareholders, check your company's charter and by-laws. While Louisiana's business corporation act contains some specific requirements, the law also permits options or variations on some of those requirements to be placed in a corporation's charter or by-laws.

Why would your corporation hold a shareholder meeting? The reasons could be several, but the first is that Louisiana law states shareholders shall meet at least once in each calendar year for election of directors of the company. No matter that you are the sole shareholder and the only person you will elect to the board of directors - an annual shareholder meeting to elect directors is a required corporate formality which should almost never be omitted.

In addition to annual meetings, there is also a need for special shareholder meetings from time to time. For example, while sales in the ordinary course of business are conducted by employees, when all or substantially all of a corporation's assets are being sold in a single transaction, approval for such must be given by the shareholders in order to be valid.

Other reasons might be contained in your company's charter, such as a charter requirement that only shareholders may approve corporate purchases of real estate or other capital expenditures.

Where must or may shareholders of corporations meet? This is a point about which your company charter is hopefully either silent, or simply repeats what the Louisiana statute says, which is: "Unless otherwise provided in the charter or by-laws, shareholders' meetings may be held anywhere in or outside of this state."

How may a meeting of shareholders be conducted? The meeting must be an event in which all shareholders come together at one place and time, can see each other, and can engage in face-to-face discourse. In other words, it must be in a setting where there can be simultaneous verbal interchange between people in the presence of each other.

While conference telephone call meetings are expressly authorized by Louisiana law for corporate board of director meetings, this method is not allowed for shareholder meetings. Even less valid is polling, for example by telephoning all shareholders for their vote on an issue, which is a procedure that is not authorized for director meetings, either.

If coming together for a meeting, if a convocation of all shareholders in a single place at a specific time on one certain day, becomes impossible or impractical, the Louisiana corporate law provides a solution. It is called a shareholder written consent. The statute provides that whenever the affirmative vote of shareholders is required to authorize corporate action, the consent in writing signed by all of the shareholders " ... shall be sufficient ... without the necessity for a meeting of shareholders.'' Such a consent can be prepared and then delivered by mail or messenger to each shareholder for signing.

Careful adherence to mandatory corporate formalities will help assure your corporation will not be deemed by an I.R.S. agent, or a jury in a civil suit, to have ceased to exist, help assure it continues to be what you intend - a shield for you against personal liability for the company's debts. Annual shareholder meetings are well worth it for that reason alone.