The liability limitations of a business entity require that certain corporate formalities are followed, so​ regular corporate maintenance is important.

Although Corporations and Limited Liability Companies generally limit the liability of their shareholders and members, there are instances where courts have "Pierced the Corporate Veil," and denied such limitation. In these cases the rationale is that the owners were not treating the business as a separate legal entity, so neither will the courts. Other than not commingling business and personal funds, the easiest way to avoid a veil piercing is to conduct regular corporate maintenance.

This maintenance typically includes holding an annual meeting of the shareholders and directors (members and managers for an LLC), and keeping approved written minutes of these meetings. For smaller organizations where an actual meeting is not warranted, written minutes of a quasi-meeting may be approved instead. Official notice, or waivers thereof, should accompany the minutes. In addition to the annual meeting, special meetings should be held for certain important decisions (mergers and acquisitions, large purchases, etc.).

Massachusetts and most other jurisdictions also require Corporations and LLCs to file annual reports with the Corporations Division of the Secretary of State's office. The specific maintenance requirements are located in the Massachusetts General Laws and the entity's governing documents.


We're glad that you're using this website to educate yourself about these important issues. While it may seem daunting, the most important step is as simple as a phone call or email.


The Law Office of David E. Peterson


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86 Dodge Street
Beverly, MA 01923

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2 Burlington Woods Drive, Suite 100
Burlington, MA 01803