You're searching online trying to find out if a Minute Book is really necessary for your business. The short answer: it absolutely is. Even the smallest companies of just one person are required to have a Minute Book. It's not only legally required (as the federal government details here), but without it, your company won't have owners. So, the sooner you get it done, the more money your business will save going forward.
In this article we’ll cover:
- What's a Minute Book?
- What documents are kept in a Minute Book?
- Company Formation Documents
- Post-Incorporation Minute Book Documents
- Consequences of not Maintaining a Minute Book
- Digital Minute Books
What’s a Minute Book?
Every corporation in Canada must maintain an official record of documents and activities. This is commonly referred to as a “Minute Book”. A Minute Book is not a stack of meaningless legal documents that collect dust. They are legally required documents that set out the owners of a company, and are frequently referred to throughout the life of a corporation.
Without a Minute Book, and the corresponding Company Formation Documents, your company won't have owners, will be unable to issue dividends and won't have official Officer roles (like President, CEO or Treasurer).
Also, when a company looks to add new owners, obtain a loan, or sell the company, in each instance, the Minute Book is the first set of documents that all parties involved will look at to start the transaction.
What documents are kept in a Minute Book?
The following documents are required to be included in a company’s Minute Book:
- Articles of Incorporation
- Extra-Provincial Registrations (if any)
- Shareholders’ Resolutions
- Directors’ Resolutions
- Share Certificates or Uncertificated Share Issuances
- Director Consents
- Shareholder, Director & Officer Registers
- Shareholder Agreement (if any)
- Annual Returns
- Board of Directors Meeting Minutes (if any)
Businesses also keep annual financial statements and tax returns.
Company Formation Documents
Company Formation Documents are the documents that are prepared at the outset when incorporating. They include: By-Laws, Shareholder and Director Resolutions, Director Consents, Share Subscriptions and Share Issuances, and more.
Without Company Formation Documents, a company doesn't have owners, is not able to have investors, doesn't have a President or CEO, and can't issue dividends.
Once completed, your Company Formation Documents will be your first set of documents in your company's Minute Book.
If you've already incorporated but are looking to have your Company Formation Documents completed, click here to learn how to start the process on Founded.
Post-Incorporation Minute Book Documents
After you've incorporated and completed your Company Formation documents, there are a number of items that will be added to your Minute Book year after year. These include resolutions and government forms when you change your registered address, add or remove directors, officers and/or shareholders. They also include your corporate Annual Returns, accompanying corporate resolutions and waiver of auditor forms. All of these documents and government filings are entirely prepared and filed through Founded.
You'll also want to consider adding your annual financial statements and tax returns.
Consequences of Not Maintaining a Minute Book
The consequences of not maintaining a Minute Book for your business are numerous. They include:
- Being in default with mandatory government filings
- Not having actual owners of your business
- Unable to secure funding: including loans or investment
- Significant government fines or penalties
- Delays when undergoing a CRA audit
- Prevent a company from maintaining court proceedings
Also, a corporation's Minute Book can be requested by government agencies, lawyers and accountants, for a number of reasons, including transferring ownership of the company, when an accountant provides tax advice, amending the Articles of Incorporation, and more.
Digital Minute Books: From 3-Ringed Binders to the Cloud
Minute Book documents used to be kept in three-ringed binders. Now, more and more companies are turning to digital minute books to store all required documents electronically in the cloud (which is how it's done through Founded). Not only does this make maintaining the minute book documents much easier, but it also allows for them to be accessed on any device: laptop, tablet or phone. On Founded, we transform your Minute Book into a digital dashboard, that keeps it all perfectly organized: