Minutes of First Meeting
The minutes of the first meeting of directors are a significant organizational document. At that meeting a number of administrative details are taken care of: the forms of stock certificate and corporate seal are adopted; the initial stock issuances are authorized; bank resolutions are passed; special committees of the board, if any, are constituted and directors appointed to the same; and officers—are appointed.
Of cardinal importance is the stock record book, since it tracks critical information: who owns what number of shares. Under Article 8 of the Uniform Commercial Code (UCC), in effect in all important commercial states, an institution known as a transfer agent monitors the issuance and transfer of shares. For large, publicly held companies, the transfer agent is usually a bank or trust company, computerized and staffed to record millions of transactions a day. Start-up companies, dealing with a limited number of stockholders, act as their own transfer agents; they (or their counsel) maintain the stock record book themselves.
For some reason, the stock book is often the least carefully maintained of the important legal records, a troublesome slip since stock certificates, the counterpart record of outstanding shares, are often misplaced by the recipients, and despite the fact that the UCC requires a bond (usually in an amount equal to twice market value) to indemnify the company against damage in the event a stock certificate is lost. (In its discretion, the issuer may waive a corporate surety and accept the shareholder's individual indemnity, the usual practice in closely held companies.) More importantly, when the need comes for counsel's opinion concerning the number of shares outstanding—as in connection with the sale of the company, a merger, or an initial public offering—an enormous amount of reconstructive attention often has to be paid to the stock record book.