Even though I grew up on the Monterey Peninsula in California, I have been a Green Bay Packers fan since I was a kid. My short answer for why I’m a Packers fan is: “I have good taste.” My long answer for why I am a Packers involves the appeal of the team representing the roots of football that started in small Midwestern towns, the fascination I have with watching the game being played in the elements – especially on the “frozen tundra” of famous Lambeau Field – and the legend of Vince Lombardi. Also: I really like cheese.
Another interesting aspect of the Green Bay Packers is that the team is unique among the major four North American team sports in that it is community-owned. The Packers incorporated to raise funds for the team in 1922. Local business leaders who were fans pitched in money to keep their favorite team in town. The Packers offered additional stock sales to raise additional money from fans in 1935, 1950, 1997, and finally in 2011. I purchased a share in 2011 and am a proud owner of one share in my favorite team.
Many ask me about the privileges I have as an owner of a professional football team. I have no access to box seats or season tickets. I do have the right to access a special section of the Packers online store to purchase merchandise that says “Packers Owner.” Yes, for $250 per share, plus a $25 transaction fee, I bought the right to buy more merchandise from the Packers. It’s quite a clever business model indeed!
Another right I have as a shareholder is to vote for directors of the Green Bay Packers Corporation and to attend the annual shareholders meeting each July at Lambeau Field. Because the Green Bay Packers team is a corporation, the team is required by law to have at least one annual shareholders meeting and one annual board of directors meeting. All corporations must have annual meetings and keep minutes of their meetings, whether they are large organizations like the Green Bay Packers or small “mom and pop” local businesses.
There are many reasons to form a corporation for a business. One reason is to raise money like the Green Bay Packers. Other reasons include tax benefits, the ability to create certain retirement plans, the ability to transfer shares of a business to partners or to sell the entire business to third parties, the ability to obtain financing from a bank, and liability protection.
In order to keep these many benefits, it is essential to hold certain meetings and to keep minutes of those meetings, even if there is only one owner of the corporation. The owners of a corporation are shareholders. They elect a board of directors who have the authority to direct the corporation’s affairs and business path and they have the ultimate legal responsibility for the actions of the corporation. The directors elect officers such as a President, Treasurer, and Secretary who oversee the corporation’s daily operations in their various roles.
A sole owner of a small business that is incorporated might be the sole shareholder and the sole director as well as hold the offices of President, Treasurer, and Secretary. Nevertheless, the corporation needs to have annual meetings and occasionally special meetings and needs to keep records of those meetings.
Annual Shareholders Meeting. At the annual shareholders meeting, the shareholders typically elect directors for the following year. After the meeting, there is typically a brief presentation about the business and operations followed by a question and answer session.
For the Green Bay Packers, the team has so many shareholders that it needs to hold this annual meeting at Lambeau Field and the meeting is often streamed live online for shareholders who are unable to be physically present. The team’s shareholders will elect a slate of directors for a specified term. For a small corporation with a sole owner, the corporation is still required to hold an annual shareholders meeting and to keep records (or “minutes”) of the meeting. The sole shareholder might elect himself or herself as the sole director but nevertheless must keep a record of the meeting.
Annual Board of Directors Meeting. The primary purpose of the annual board of directors meeting is to elect officers of the corporation. Furthermore, the annual board of directors meeting will also often include a treasurer’s report from the prior tax year. For a large corporation like the Green Bay Packers, this could be a lengthy process. For a sole owner corporation, it could just be a matter of the owner electing himself or herself to the key officer positions and making a record of the financial condition of the company.
Other agenda items for the annual board of directors meeting might include discussing the need to obtain financing, substantial changes to officers’ salaries, the decision to issue shareholder or dividend distributions, and major changes in the operation of the business including application for trademark protection of the company name and a change in the company’s principal business.
Special Board of Directors Meeting. Periodically, the need to address typical board of directors meeting agenda issues other than electing officers comes up during the fiscal year, many months away from the next annual board of directors meeting. In such a circumstance, it might be necessary to call a special board of directors meeting to discuss and to act upon such issues.
While it might seem silly for a sole owner of a small corporation to hold annual and special meetings with himself or herself, in order to maintain the integrity of the corporate structure, it is important for all corporations – large and small – to regularly hold such meetings and to keep minutes of those meetings in the corporate record book. If the owner is ever faced with the need to demonstrate the legitimacy of a business’s corporate structure for tax or liability protection, the owner will be relieved to have a corporate record book that contains minutes from years of annual and special shareholder and director meetings.
KRASA LAW, Inc. is located at 704-D Forest Avenue, Pacific Grove, California and Kyle may be reached at 831-920-0205.
Disclaimer: This article is for general information only. Reading this article does not establish an attorney-client relationship. Before acting upon any of the information contained within this article, you should consult a competent attorney who is licensed to practice law in your community.