Understanding Corporate Minute Books

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Corporate Minute Book Lawyers: Simplify Corporate Life

This page explains what corporate minute books are, why they are important and the basics of what you need to know. The whole legal basis of your business is based on a minute book. The need to be done right, updated annually and be well maintained. Kahane Law Office knows corporate minute books. Need help in Calgary, Alberta. We are here 403-225-8810.

What Is A Corporate Minute book?

In Calgary, and all Alberta, a corporation is an entity created by law. The Business Corporations Act deals with corporations and minute books. They legally have many of the same rights as a person. Without the law, these rights would not exist. A corporate minute book organizes and records all the legal information about the corporation. It is usually kept in a bind of some kind. While you can see the physical location of a corporation, you cannot actually see the legal entity that is the corporation. The minute book reflects that legal being.

What Goes Into A Corporate Minute Book?

  • Certificate of Incorporation;
  • Articles of Incorporation;
  • By-Laws of the Corporation;
  • Articles of Amendment;
  • Corporate Name Changes;
  • Registered Address of the Head Office;
  • Registered Address of Service (may be different than head office);
  • Notices and Registrations (filed with the corporate registries);
  • Notice Concerning Board of Directors;
  • Resolutions and Meeting Minutes of Director and Shareholder Meetings (Annual and special);
  • All Corporate Resolutions
  • Directors’ Register;
  • Officer’s Register;
  • Consents to Act as Directors;
  • Letters of appointment of Directors;
  • Shareholders’ Register;
  • Share Transfer Register;
  • Stated Capital (number of issued and outstanding shares);
  • Share certificates;
  • Corporate seal; and
  • Unanimous Shareholder Agreements

What Is A Directors Register And Shareholders’ Register

The registers record who are past and current Directors and shareholders respectively. These must be kept up to date. For shareholders, the register will also record the number and class of shares held by each shareholder.

Resolutions Of The Board / Shareholders

Decisions of the board of directors and the shareholders are required to be made by vote. These votes are called resolutions. In order to make sure that each vote is recorded properly, the corporation is required to keep minutes of the meetings that the votes were made in and the specific resolution. The resolution is the exact language of the decision that was voted on. Any major change to the corporation but be made by this type of vote and recorded in the corporate minute books. Corporate minute book lawyers help make sure that these requirements are met.

What Is “Maintaining” Minute Books

To maintain your corporate minute books, you must record the following:

  • appointment of directors and officers;
  • filing and recording annual corporate returns;
  • appointment of accountants for the next year;
  • Waive the requirement for an audit;
  • approval of the last years financial statements;
  • record shareholder;
  • all record all dividends;
  • record all shareholder and director resolutions; and lastly
  • record share transfers.

Why Corporate Minute Book Lawyers Should Maintain Your Minute Books

Your corporation is legally required to maintain minute books. There are penalty provisions for failing to do so. While it is rare for a company to be fined, the following are real life examples of failing to maintain your corporate minute books:

  • Higher Taxes, Tax Penalties and Fines: Failure to properly record dividends can result in shareholder dividends being treated as income by the Canada Customs and Revenue Agency (formerly Revenue Canada).
  • Higher Taxes, Tax Penalties and Fines: Shareholder loan repayment (tax free to shareholder) being treated as income (taxes at shareholders’ income tax rate).
  • Inability to Get Bank Loans: If a bank cannot determine that the corporation legally exists or has the right to borrow money, the corporation may have to borrow privately. A client of ours was in this situation and had to pay $90K in fees to get a loan at 19% instead of a nominal bank loan at under 5%.
  • Inability to Sell the Corporation: No one will buy a company that does not legally exist.
  • Inability to Own Real Estate: Alberta Land titles will only recognize and record real property into corporations that legally exist.
  • In ability to Contract: Your company cannot legally contract if the corporate minute books are properly maintained. Suppliers and other companies may not do business with companies that do not have up to date minute books.
  • Shareholder Disputes & Audits: If not recorded properly, minority shareholders can dispute corporate decisions. They can also demand a costly audit.
  • Cost to Fix: The cost to have corporate minute book lawyers maintain your minute books, is nominal. The cost of have the minute books reviewed and fixed is much more expensive.

Corporate Minute Book Lawyers in Calgary

If you have any questions about creating a corporate minute book, or need help with an existing one, contact our Calgary law firm. We look forward to your call, and hope that we will be able to help you, as we have helped our other clients.

We can be reached at 403-225-8810 locally in Calgary, Alberta or toll-free at 1-877-225-8817 or email us directly here.