08 Jul Maintaining a Corporate Minute Book
Is your corporate minute book up to Ontario or Federal corporate law standards? Maintaining the corporate minute book is not a high priority on the to-do list of most entrepreneurs, start-ups, or companies. Many owner-operators or management teams are not even aware that the Ontario governing corporate law statutes require a corporation to prepare and maintain certain prescribed corporate records and that these records must be kept, in physical or electronic form, at the corporation’s registered office or a place designated by the directors, such as a law firm.
A non-existent or out-of-date corporate minute book can cause a host of problems for your business, and the longer you wait to remedy the situation, the more difficult rectifying those corporate records can become. Abrahams LLP helps companies prepare and maintain their fundamental corporate documents so that the company not only complies with the statutory requirements but may also build a solid corporate records foundation from which to conduct various business transactions over the course of the corporation’s life cycle.
Why You Need a Corporate Minute Book That is Up-to-Date
Almost every business transaction that a corporation conducts necessitates having an up-to-date and accurate corporate minute book. Without a corporate minute book, a corporation may experience difficulties:
- Issuing shares to shareholders
- Adding or removing directors and officers
- Issuing shares to employees under a stock option plan
- Transferring shares between owners
- Bringing in a new owner or investor
- Selling the company or assets of the company
- Conducting an audit or presenting the financial statements to third parties
- Entering into certain contracts and commercial agreements
Any investor who is considering making an equity investment will want to review the corporation’s minute book as part of their legal due diligence investigations. Not having a corporate minute book or sharing a minute book in a disorderly state is one definitive way to discourage potential investment. The same applies to a lender in the case of debt financing.
The records in your corporate minute book can also help preserve the independence of the corporate legal structure, protecting owners from individual liability. And don’t forget that failing to maintain the appropriate corporate records could subject you to various regulatory problems and sanctions including being dissolved for non-compliance.
Understanding Corporate Minute Book Requirements
A corporate minute book must, per the Business Corporations Act (Ontario) or Canada Business Corporations Act, contain certain prescribed documents and information. Some of these documents, such as the articles of incorporation and corporate by-laws, may not change frequently, however, other documents, such as shareholder and officer registers, director and shareholder resolutions, and ministry filings, may require frequent updates.
Abrahams LLP works closely with businesses to bring their records up-to-date and to ensure that all appropriate information is included. If you have never considered your corporate minute book, you are not alone—this task is often overlooked, particularly during the early stages of a business’s life cycle. However, early on in a corporation’s life cycle is the best time to get its record-keeping procedures in place to reduce administrative and legal costs and burdens in the future.
Get the Records Straight Before You Need Them
The time to get your corporate minute book organized and develop a maintenance plan is now, so they will always be ready when you need them. At some point, you may sell your business or look to bring in new investors, and having your minute book in good shape adds a high degree of sophistication and credibility to your company and facilitates speedy and smooth transactions.
We Help with the Maintenance of Corporate Minute Books
The experienced team at Abrahams LLP understands the importance of a well-organized corporate minute book. We frequently help clients locate and organize the information necessary to prepare a proper corporate minute book, and we assist with maintaining essential documents and records. Talk to us today to find out how we could help meet this or other commercial and legal needs.