When you incorporate your business, it becomes a separate legal entity, holding similar rights as a person in terms of liability and protection of assets. Depending on where you plan to do business, you’ll need to choose whether you want to incorporate federally or provincially. The articles of incorporation must then be written, as well as the names of the corporation’s stockholders. Limited liability will apply once your business is incorporated, which means the assets of the company will be fully distinct from the assets of the owners and investors.
What is a minute book?
There are several company records that are required by law to be maintained. Every corporation in Canada is required by law to keep records of its activities, including any meetings of the company’s directors or shareholders, changes in address or office, shareholders or directors, and articles of incorporation. A corporate lawyer is sometimes hired to keep these documents in a book or binder known as the Minute Book. It acts as a system for organizing and storing all of the corporation’s records. Although keeping a Corporate Minute Book is not required by law, it is the recommended technique for keeping the records that are needed by law. It can be maintained both physically and digitally up to date.
A corporate minute book is subjected to governmental review or audit, even though it is primarily for your reference. During an audit of several tax accounts, the Canada Revenue Agency can seek to inspect the minute book.
Do you need a corporate minute book?
You certainly do. Purchasing and/or making a minute book at the start of a business is often seen as a waste of time and money by most entrepreneurs. However, having a proficient minute book from the start of your business that is consistently maintained, can be crucial to its success.
You can keep track of all of your key business documents in one place if you keep an up-to-date corporate minute book. If you decide to sell your company, you will be able to easily present your records to shareholders, creditors, or possible buyers.
What Does A Minute Book Include?
The corporation’s bylaws and corporate resolutions, such as electing officers and directors, funding bank accounts, authorizing stock certificates, and corporate insurance, are all recorded in the minute book. The information in a corporate minute book is compiled during board of directors or shareholder meetings, as well as special shareholder meetings held for specific objectives, such as an extraordinary resolution. During minutes-recorded meetings, company bylaws are also created or amended.
It’s a good idea to keep minute books at the registered office to keep track of what’s going on with the officials, directors, and shareholders. They must be kept up to date because they provide information on how the corporation’s structure was altered. The bylaws and minute book of a corporation are public documents. They contain vital information that you should keep private, such as the amount of stock held by each shareholder.
How to keep your minute book up-to-date?
There are several things you can do to keep your minute book current, including:
- Holding regular meetings of the directors and shareholders;
- Recording all decisions made during these meetings in the minutes; and,
- Updating the bylaws as needed.
You should also save corporate records, such as proof of corporate status, bank accounts, resolutions allowing bank account opening, stock issuing paperwork, and minutes of shareholder meetings.
The board of directors or shareholders pass a corporate resolution, which becomes part of the official record. One of the most typical resolutions voted to date is establishing or revising the corporation’s bylaws. Bylaws are adopted by boards of directors, although shareholders can vote to adopt or alter them. Calling shareholder meetings for specific objectives, making key company decisions, and choosing officers are all examples of corporate resolutions.
You do not need to keep a Company Minute Book if your business is not incorporated. However, if you’re not aware of what incorporating your business means or what benefits you might expect, IDM Professional Corporation CPA can walk you through it.
