Prevent Unnecessary Hassle by Keeping Your Minute Books Updated
Your business’ minute book serves as the official record book of your corporation’s activities. Minute books document many transactions, including the election of directors, appointment of officers, dividend issuance, declaration of management bonuses, and the purchase & sale of shares, and they record resolutions or decisions made by directors and shareholders.
If your corporation fails to properly maintain its minute book, it may face certain repercussions, including:
- Added time and legal fees required to review and document past corporate proceedings, including past share issuances, share transfers, dividend declarations, and approvals of shareholder loans
- Delays when a shareholder requests information about decisions made by the board of directors or when they have other questions and concerns
- Delays in proceeding with large or significant transactions that could have a positive effect on your company, such as the proposed sale of additional shares or a potential investment from a third party
- Current directors being held accountable for actions taken by former directors
- Difficulties for new directors attempting to understand the corporation’s past history
- Monetary penalties that can result from the minute books not being properly maintained in compliance with the law
To avoid the issues listed above, make sure that you record all major business events in your corporate minute book and review the minute book on a regular basis. If your minute book is not up to date, and you are unsure how to bring it into compliance, contact our office for assistance.
Articles on this blog are general in nature and are provided for informational purposes only. Use of this blog does not provide or replace individualized legal advice and does not create a solicitor-client relationship with our firm. Users who require legal advice on a particular matter should consult directly with Mr. Eric Cohen, Barrister & Solicitor, an Ontario lawyer or a competent lawyer in their Province or State.