A corporate minute book is required and essential to any corporation’s record-keeping documentation. All corporations incorporated under either the provincial and federal Business Corporation Act are obligated to maintain accurate and up-to-date minute books pursuant to the corresponding governing legislations. Failure to comply with this requirement may result in unnecessary penalties, fines, or legal disputes against the corporation. For example, section 256 of the Ontario Business Corporations Act states that an incomplete or inaccurate minute book may be considered to be a “misrepresentation”, which can result in a finding of liability by the corporation and its directors.
In addition to being required by law, a corporation should maintain a minute book for the following reasons:
- A well maintained corporate minute book can prevent disputes surrounding decisions and ownership percentages
- If you sell your business or want to attract investors, a minute book review will be conducted by the lawyer of any potential buyer or investor
- The corporation’s accountants and Canada Revenue Agency may need to review your corporate records.
What is a minute book?
It is a record in loose-leaf binder form used to file all important corporate documents such as the articles of incorporation, corporate by-laws, resolutions of the directors and shareholders, among other legal documents. Both the provincial and federal legislations allow these records to be electronic.
What are included in a minute book?
It contains a compilation of:
- Corporate Articles
- This includes articles of incorporation, articles of amendment (if any). The articles of incorporation is a legal document submitted to provincial or federal government which establishes a business within Canada.
- Corporate By-laws
- This includes by-laws and their amendments. By-laws are rules that govern the internal operations of a corporation.
- Directors Register
- This document lists the name(s) of a director(s), their residential address, whether they are a Canadian resident, the date they became a director, and if applicable the date they ceased to be a director.
- Forms Filed
- This includes all documents that have been filed with government entities (Corporations Canada for federal corporations or the Ministry of Government and Consumer Services for Ontario corporations). The forms will differ depending on whether your corporation is incorporated under the provincial or federal legislation.
- Notices and Resignation
- These are notices sent out for all director and Shareholder meetings. Any director change in address for director resignation.
- Officers Register
- This document lists the name(s) of an officer(s), their residential address, the date they became an officer, and the date they ceased to be an officer if applicable. Typically, the officers of a corporation are President, Treasurer and Secretary.
- Resolutions and Minutes
- These include all director resolutions, shareholder resolutions, minutes of a directors meeting, minutes of a shareholders meeting, and consent to act as director.
- Share Certificates
- These documents certify ownership of a specific number of shares (or stock) in a corporation.
- Shareholders Ledger
- This lists the holdings of each specific shareholder, documenting the date they received shares, the certificate number, the transfer number, to or from whom the shares were transferred, the number of shares sold or purchased, and the balance of shares they have.
- Shareholder Register
- This document lists the names and addresses for all shareholders, and details of shares held.
- Shareholder Agreement
- This specifies the rights and regulations of shareholders in a corporation. If applicable it should be included in the minute book.
When must a minute book be updated?
Many triggering events will require a minute book to be updated. For example, changes to the directors, officers or shareholders must be reflected, as well as location changes of a corporation’s registered office. When an update occurs, it must be done so through a resolution of the directors and shareholders.
Some components that should be reviewed and updated on an annual basis are:
- Appointments of directors and officers
- Records of the previous year’s approved financial statements
- Records of the previous year’s important corporate developments, such as share transfers
If you are already incorporated and need to organize or update your minutebook or if you are going to incorporate your business, we are ready to help answer any questions you may have and ensure you are compliant with the law.