Keeping a minute book is a legal requirement for all Canadian incorporated businesses pursuant to the requirements of the Canada Business Corporations Act and Ontario Business Corporations Act to document the corporation’s activities. Minute books can be subject to government review to ensure your business is in compliance. Further, minute books might be requested by government agencies, lawyers or accountants in the following instances:
- CRA audit;
- Obtaining tax advice on corporate planning;
- Sale of shares by a shareholder;
- Sale or refinance of your business, ownership of assets (including real estate); and
- Amendment to articles of incorporation.
What is a minute book?
A minute book is a collection of legal and corporate documents tracking an incorporated company’s activities.
It keeps a record by containing the Articles of Incorporation, the corporate by-laws, the resolutions of the directors and shareholders, ledgers and registers of the company’s principals, along with a history of important business decisions such as payouts of dividends, obtaining loans and mortgages, any shareholder agreements, etc.
Why do minute books matter?
There are a number of reasons why it’s important to maintain your minute books:
- To prove compliance with statutory requirements, failure of which could to fines by CRA as part of an audit;
- To be able to open a bank account and obtain corporate financing;
- Required if you sell shares or assets of the corporation; and
- CRA may treat payment of dividends as income if you don’t keep proper corporate records of payments made out of the corporation (which is subject to a higher tax rate).
Benefits of keeping a minute book
Maintaining your minute book allows you to keep all your important corporate records up-to-date and in one location. You will easily, and without any delays or additional legal costs, be able to provide corporate information to creditors, shareholders, or potential purchasers.
MMA Law provides expert guidance for all your Corporate Law needs. We serve all of Ontario via remote video or in-home signing service as well as in person services at both of our Richmond Hill and Vaughan locations. Contact us today at 289.818.2772 Ext. 2772 or email maria@mmalaw.ca to book your appointment today.
The content provided is for informational purposes only and in not legal advice. Do not rely on this content to make legal or business decisions. Always seek professional legal advice relevant to your situation.
