Maintaining your corporate minute book
Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to incorporating your business or updating your minute book, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Mississauga, Brampton, and other Ontario business lawyers registered on the website who can answer your questions or help you with your corporation. I should know – I’m one of them and you can contact me directly (michael@carabashlaw.com).
Yes, I’ve previously blogged about the need to update your corporate minute book. But I thought I would write another blog about the matter, given the importance of doing so.
What is a Minute Book?
As I previously discussed in this blog, a minute book is a binder full of documents that are relevant to the establishment, organization, and ongoing business affairs of your corporation. It doesn’t have to be in any particular form. It’s more like a binder than anything else where you can slip in the following (usually in this order):
- Incorporation Certificate;
- Articles of Incorporation;
- By-Laws of the Corporation;
- Consents to Act as Directors;
- Resolutions and Meeting Minutes of Director and Shareholder Meetings;
- Register of Directors (this shows who has been a director, when they were a director, and their address);
- Register of Shareholders (this shows the class of share and number of shares issued to a particular shareholder);
- Stated Capital (which shows the number of issued and outstanding shares);
- Share certificates (these are the pieces of paper which show who owns the shares in the corporation); and
- Corporate seal (although it is not formally required, a corporation may use a corporate seal which may have a logo and its name on it to stamp on documents for business purposes).
Director, Officer, and Shareholder Registries
The minute book contains various registries. This will tell you WHO the directors, officers, and shareholders are or were and when. These registries should be kept up to date. When a person is selling the shares of their corporation, the buyer will want to examine the minute book to see who the directors and officers are (to ensure that the person signing the share purchase agreement for the vendor has the requisite authority to do so). The purchaser will also want to make sure who the shareholders are, what types of shares they have, etc.
Resolutions of the Board / Shareholders
When the board of directors do something on behalf of the company, a resolution is often passed by the board at a directors meeting. Sometimes, the directors passing a resolution requires approval from the shareholders. So the shareholders will need to have their own meeting and pass resolutions confirming the directors’ resolutions. What kinds of things require these types of resolutions, you ask? Well, adopting by-laws, making significant changes to the corporation (e.g. amending the articles), etc. all require that the shareholders approve of the director action.
What if you don’t have an up to date corporate minute book?
If you don’t have an up to date corporate minute book, a lot of professional fees could be wasted on trying to piece together everything. Who are the directors? When did the old ones retire? Was a Form 1 notice of change sent to the Ontario government (for an Ontario corporation)? Was the director registry updated? Were director consents obtained? Were director resolutions passed every year? These and other types of questions will need to be asked and the minute book will need to be updated before any further transaction can take place.  Not only can transactions be put on hold until the minute book is updated, but delays could occur for things like: the corporation failing to respond to shareholders, directors or officers in a timely fashion about corporate affairs; the corporation failing to file government forms and notices; directors being accountable for things that occurred while they were not in office (because of a failure to update the corporate minute book and send in the proper government notices).
So the bottom line is that you should maintain an updated corporate minute book and, if you need help doing so, you can contact me directly to help you.
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