What is a minute book?
A minute book is simply a collection of important corporate documents and records of company meetings and important decisions. The term “minute book” is not specifically noted in the laws applying to corporations in Canada, but there is a legal requirement to store certain documents and records of a corporation. The term “minute book” is used because the “minutes” (or notes) recorded during meetings of the company’s owners and directors are stored in the minute book. This serves as a record of all the important decisions made by the corporation and proof that the decisions were made properly, in accordance with the law and the corporation’s internal rules.
When is it time to get a minute book?
Immediately following incorporation, a company needs a minute book. No, not the leather-bound three-ring bounder found in a lawyer’s office, but a secure digital minute book accessible any time, which you can manage and maintain instantaneously without the hefty legal bills.
Do I really need a minute book?
Aside from a record of important decisions, the minute book serves another major purpose – it is the sole record of the company’s owners. Without a minute book, a company has no owners! Unlike directors, there is no public record for a corporation’s owners. The minute book serves as that ever-important record of shareholders. Some other reasons why a minute book is necessary include:
· Investors may request the minute book to confirm the company’s ownership and compliance with legal requirements.
· A bank may request the minute book prior to lending to determine who has authority to borrow funds on behalf of the corporation.
· Purchasers of a company will certainly want to see the minute book to ensure they are purchasing a company in good standing and getting what they bargained for.
· Real estate transactions frequently require proof of ownership of the corporation.
· Government entities such as the Workers Compensation Board and the Canada Revenue Agency may request to see the minute book.
· To prevent fraud by fraudsters preparing fraudulent minute book documents and claiming ownership to an existing company.