What is a Minute Book, and do I really need one?
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Most businesses reach a point where it becomes essential to incorporate. Irrespective of the reason for incorporation or the type of Corporation, it is important for a Corporation to keep certain records at its office. These records generally reflect a record of activities and can be subject to review and audit by the Government to ensure that you are in compliance with the laws (Federal or Provincial) applicable to the Corporation. These records are generally kept in a binder known as a “Minute Book”. But, why is it called a minute book? The minutes of meetings are recorded in the Minute Book and that is why it is referred to as so.
Contents of a Minute Book: A minute book will generally have the Certificate of Incorporation, Articles of Incorporation, Corporate By-Laws, Director and Shareholder Resolutions, Resolutions setting out the offices and the officers elected, Forms of share certificates, Approval of Corporate Seal, Appointment of Accountants and Auditors, Issuance of Shares, Appointment of Banks with bank account information and appointment of Signing Officers, and the Register of the Directors, Officers and Shareholders. Apart from the initial requirements, there are other important matters that must be recorded in the Minute Book. Some of them include: annual meetings of shareholders and directors, details of the corporation’s financial statements and filing periods, appointment or change of officers and directors, amendment of share structures, decisions made by directors to purchase or sell a property, revenue filings, and change of address of the corporation.
Do I Need a Minute Book? Failure to maintain a Minute Book may result in fines up to $25,000.00 and may also prevent the Corporation from maintaining proceedings in a Court. Regularly updating the Minute Books is very important; especially as events of change in a Corporation occur. It can be very hard or nearly impossible and costly to update the minute books at a later date. For example, imagine if one of the directors passes away or cannot be located or refuses to sign the Corporate documents after leaving the Corporation due to his/her departure from the Corporation due to a dispute. Minutes book play a very important role in recording the decisions made by the directors, and play a further role in litigation if a dispute arises over any decisions made by the directors of the Corporation. Lastly, investors, purchasers and lenders rely heavily on the Minute Books of a Corporation; especially during a purchase, sale, share purchase or investment transaction.
Contact us today to ensure that your Minute Books are up-to-date. We can also store them at our office and maintain them on a regular basis as Corporate changes or events occur; provided that you notify us of such changes and events.