In this solo presentation, Mark Kohler explains why small businesses, whether organized as corporations or LLCs, should establish a board of directors (for corporations) or a board of advisors (for LLCs). He outlines five practical tips: (1) the board structure should be defined in the entity’s bylaws or operating agreement and recorded in meeting minutes; (2) a board provides essential emotional and strategic support, helping entrepreneurs avoid isolation; (3) regular board meetings generate legitimate tax‑deductible expenses for travel, meals, and entertainment when properly documented; (4) holding formal, documented meetings reinforces the corporate or LLC veil, offering stronger asset‑protection in the event of litigation; and (5) the board creates accountability by tracking goals and timelines. Kohler stresses that these practices should be discussed with a lawyer during entity formation and recommends his firm’s affordable annual company‑maintenance service ($150 per entity) to set up and maintain the necessary documentation. He concludes with calls to action for viewers to explore his tax‑legal library, subscribe, and join his newsletter.
Chapters
Hi, Mark Kohler here with another tax and legal tip. Talking about board of directors or board of advisors. Now some of you may think this is a big corporate type strategy and you're too small to ever have such a thing. But folks, this is a fantastic tax strategy, legal strategy and business strategy. Frankly, I should have been shooting more videos and writing more blog articles about this topic. I and I got five tips for you. Number one, this should be used for corporations and LLCs. Don't think you're left out in the cold because you don't have an ink behind your company name. An LLC is fine. I call it a board of directors if it's a corporation and a board of advisors if it's an llc. In the bylaws of your corporation, it's going to define the role of the board of directors in an operating agreement for an llc. And in the minutes you should have a definition for your board of advisors. Both companies should have this team of advisors or directors to help you in your business. Number two, this will help you succeed. This is a key strategy. Forget taxes and asset protection. This will help you succeed. Because being an entrepreneur can be lonely. Yep. You know what I'm talking about. A lot of times we need a team of people that believe in us. It may not be your family, right. But a team that's going to believe in you, help you succeed, give you encouragement. This board is a group of people, maybe three to five that you can meet with on a regular basis for dinner, a barbecue, some sort of meeting where you can talk about your goals and objectives and they will give you constructive but supportive advice. Number three. And of course it's a great tax write off. This is your corporate trip, your annual trip, a regular meeting, once a month, once a quarter. This is a trip that can be local for just a night out for dinner or it could be to Vegas for a big party juggernaut and a corporate meeting. I don't care. You don't want to overdo it based on the size of your business. But this is something that is certainly a tax write off. You're going to take notes during the meeting and you're going to talk about how to succeed in your business better and get advice from your board of directors or board of advisors and take notes and thereby justify the tax write off for the travel, dining and entertainment involved with your meeting. Number four, we've got to be doing this for asset protection, right? If you've got a corporation or an llc, I want you having annual meetings at least. And you Might do it more frequently, quarterly or monthly. But in these meetings you're going to substantiate the corporate veil or LLC veil. You're going to be talking about the sales of the business, the goals, the objectives, what you've sold, what you bought, who you hired, who you fired and what where the business is headed. You're going to write it down and put it in the minutes of your LLC book or your corporate book. That's going to help you out in a big way if there's ever a lawsuit. That asset protection maintenance is critical. And I've got other videos and writings about how to maintain your corporation or llc. And having the annual meeting with your board of directors and advisors or more regular than that will help you with your asset protection Number five and I added this one for an important reason and that is your board will hold you accountable. Again, kind of similar to the loneliness of an entrepreneur. It's also a very self driven process where you have to hold yourself accountable to get up in the morning and get work done and get dressed and get going. But with the board of advisors and directors, I want you to share your goals. When you share them, they become real. And I want your board of directors and advisors to hold you accountable. Are you going to meet certain timelines? What's your goal for this year, this month, three months from now, six months from now? That's what a board can do to help you succeed. Not only the encouragement and support, but that ability to ask you how you're proceeding and hold you accountable to the goals you're setting. Bottom line, this is an important tool you should be using and meeting with your lawyer about when you set up your entity, structuring your board of directors and advisors. And if you don't have this in place, get it done with your annual maintenance. We have a company maintenance system at our law firm. Very affordable. Once a year, 150 bucks an entity to get all these pieces and parts done. Talk to Becky Lloyd, the director of that department, if you need help getting your company maintenance in place. Bottom line, this is something that will save you taxes, give you better protection and help you succeed as a business owner. Thanks so much for watching and if you found that helpful, please look in the description below. I've got links to my tax and legal library, my QuickBooks training videos, how to start a small business. This 50, 60, 70 videos, some as long as 30 minutes, explaining more information on tax and legal strategies that will change your life. Also, if you'd like to subscribe to my newsletter or check out my social media links, please click here. There are weekly free tips and strategies and articles that you'll find extremely helpful and I would appreciate it if you'd subscribe to my channel. I've got so many videos here I produce every week on my YouTube channel and I'd love to give you a ping every time I shoot a new video. Thanks so much and keep living the American Dream.
