The Need and Importance of the Corporate Minute Book for Incorporated Businesses in Canada
April 30, 2020 | Written by: Sohail Afzal
Every incorporated business in Canada must maintain the corporate minute book. The documents appended to this book are all corporate legal documents and may be referred throughout the life of a company. If you have an incorporated business in Canada, your company may have to furnish this minute book to its lawyers and accountants at any time. This record book may also be required by government officials. This is an official record book of the incorporated business that holds important corporate documents such as:
- Articles of incorporation
- Certificate of incorporation
- Share certificates
- By-laws and other legal documents
- Directors’ minutes of the meeting
- Shareholders’ agreement
- Documents related to the annual general meeting and board resolutions
- Tax filing documents
- Dividend declaration documents
Your company may also need to provide the corporate minute book on the following occasions:
- At the time of opening a corporate bank account
- When applying for a bank financing
- If your company gets audited by the CRA
- Sale and transfer the ownership of shares
- At the time of corporate planning and reviewing tax strategies
- When an amendment is required in the articles of incorporation
- At the time of merger and acquisitions
If your company doesn’t maintain the corporate minute book, you are exposed to certain risks that are associated with it. Here are the potential consequences of not maintaining a minute book for the incorporated business:
- CRA audit may get delayed
- CRA may impose certain penalties
- Fines & penalties of some significant government departments
- The court may initiate legal proceedings against your company
One of the most important benefits of maintaining the minute book is that when you are looking to raise capital from external investors, they may ask you to share this book with them. Those investors may likely to review and examine the book to determine whether they should invest in your company.
Nowadays, many incorporated businesses are converting their conventional minute book to a digital minute book to ensure that their legal documents can be saved electronically in the cloud. It is the easiest way to organize and manage these documents over a virtual environment and it can be accessible all the time. Moreover, the soft copy of these documents can then be shared with an entity needing these documents. You can also create a digital dashboard for all your legal documents which keeps it perfectly organized.
Lastly, if you cannot maintain the corporate minute book for your company, you may outsource it to your lawyers or external accountants, and they can organize it for you at a very low cost. GTA Accounting can also update and maintain your corporate minute books. Please fell free to reach out to us if your minute book need to be updated.
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.