What is a corporate minute book?
A corporate minute book operates as the official record of your corporation’s activities. Any and all corporate transactions that involve your corporation should be documented in this book. Below are some documents that must be included:
Articles of incorporation
Registers of directors, officers, and shareholders’
Resolutions of the directors and officers
Notices and registrations filed with the registry
Why do you need a corporate minute book?
It’s the law
Not only is a corporate minute book required by law in BC but also in all of Canada under the BC Business Corporations Act and the Canada Business Corporations Act. Not having a minute book can result in you being convicted of an offence under the Act and fined up to $5,000.
Requests for investments and bank loans
If you are looking to attract investors, your corporate book will outline the validity and structure of your business for them. Potential investors will also examine the record of all existing and previous shareholders along with the consideration that was given for their shares.
Similarly, your corporate book will be of interest to banks if you are trying to secure a loan. Examination of the shareholder’s agreement and articles of incorporation will help them determine which individuals are allowed to borrow money.
As mentioned, maintaining a corporate minute book is required by law. So, if a government agency makes a request to access it, this request must be accepted, and the minute book must be made available.
Transferring ownership and/or selling the corporation
A corporate minute book is necessary for transferring shares because it will demonstrate to the transferee that you actually have ownership of those shares to begin with.
A corporate book also helps greatly when you are looking to sell your business. A potential buyer will want to examine the transaction records of the corporation and an updated minute book will make this much easier.
It may not seem important to some, but it is not a good idea to put together a corporate book only when access is requested. This will be extremely time-consuming and expensive. Furthermore, you may not be able to gather all of the relevant documents which could result in certain sanctions being imposed.
If you are looking to incorporate your business or already have, and require assistance with putting together or maintaining a corporate minute book, you can call to book a consultation.