Get out of the “Bored” Room — Planning Shareholder and Director Meetings

     Shareholder and Directors meetings need not be held in the office or around the dining room table in the founder’s home. In fact, in-office (or in-home) meetings are usually unproductive and full of potential distractions. Meetings in a relaxed environment (even at a resort or on cruise ship) may allow the participants to focus on problems at a distance and thus be able to analyze them better.

     If at least half of each day is spent on business, 100% of the meeting expenses can be deducted. Business and pleasure can also be combined. If at least half of the out-of-town days involve business the other days can also be included. The business meetings should be documented in the minute book with a notice of the meeting, a copy of the business agenda, and the minutes of the actual meeting. The minutes of the meeting can be in a narrative form or merely a summary of discussions and the action plans, if any, that resulted.

     The meeting can be expanded beyond the actual shareholders meeting and board of directors meeting. The business may choose to invite advisors, non-employee family members, sons and daughters-in-law, and even grandchildren in the process of shaping the business's future.

     The agenda for the meetings can vary, depending upon what the participants would like to cover. Topics can include the mundane:

• Election of directors
• Election of officers
• Review of financial statements
• Departmental reports: Finance, Sales, Operations, etc.

     But if you want to spice up your meeting consider an outside facilitator or a presentation by a family business consultant. Topics might include succession planning or current developments in tax or tax planning. You might also consider the following discussions:

• A futurist might focus on new and changing markets.
• Strategic planning might focus on positioning the business as we move out of the recession.
• Research and development discussions might focus on product enhancements or changes to the shop floor that will improve the flow of materials.
• Operations might invite a management consultant to discuss the integration of new technologies, etc.

     The expenses associated with the related meetings of the board, the shareholders, and the other related participants can be a deductible. Remember the two key rules: (1) maintain minutes of the meetings and (2) conduct business on at least half of the days.