The Importance of a Corporate Minute Book
A Minute Book is a set of legal documents created when you incorporate a company and created annually and each time a major decision is made. Corporations must comply with certain annual filings and record corporate resolutions in the Minute Book. A Minute Book keeps tracks of key company details and important decisions such as issuance of shares, payment of dividends, major financial transactions, major purchases / investments, loans and mortgages, buy/sell agreements, USAs (Unanimous Shareholder Agreements) and payment of bonuses to officers and directors.
Why do I need to maintain a Minute Book?
· Financing and banking - A bank will want to confirm the corporate structure, who the directors and shareholders are and other major decisions affecting the corporation.
· Sell the corporation - a buyer will want to make sure you have kept proper records and to review a written record of the history of the corporation.
· Capital Investment - If you want to expand your company and want investors, an investor will want to review the Minute Book to ensure you have a valid and subsisting company with diligent record keeping.
· Succession Plan - You may wish to transfer ownership down to family.
· A Minute Book, simply put, is evidence of ownership.
· If the corporation is audited by CRA or other government agency, you will want a complete, up-to-date Minute Book and not have to scramble to put one together.
· To prevent a fraudulent take-over of your corporation by strangers; a well-maintained Minute Book is proof you own the corporation.
· It is proof that you have properly filed all Corporate Annual returns.
· It is less costly to keep a Minute Book up to date from year to year than it is to recreate a Minute Book when you need one.
You should take your Minute Book to a trusted lawyer annually to make sure you have covered all major business decisions and have them properly recorded when they occur. We are here to assist you by taking care of your corporate legal matters and to make sure you are prepared to grow your business and prosper from start-up to wind-up.