Legislation sets out that each incorporated business is required to maintain a minute book for review by shareholders and creditors at their request. Many corporations do not fulfil this requirement.
When first incorporating, your lawyer will advise you and usually draft as part of their services, the documentation that needs to go into the minute book.
These include:
1. The Articles of the Corporation.
2. The bylaws of the corporation that set out the rules of corporate governance (paying dividends, the officers and directors of the corporation and when is the fiscal year end).
3. The resolutions of the corporation to set out type and amount of shares issued, appointment of specific directors and officers, and share certificate specimens.
4. The registers of the corporation that keep track of the shares, directors, officers and shareholders.
5. The actual share certificates that constitute the capitalization of the corporation.
6. Any forms that are filed on behalf of the corporation with authorities.
On an annual basis, the corporation should process standard resolutions that re-establish the officers and directors of the corporation and set out any dividends that may have been paid to the shareholders. This is simple housekeeping that keeps the records up to date and makes it relatively simple if, down the road, the shareholder(s) want to sell the company.
Jeffrey D. Cowan, B.A., B.Comm, LL.B., M.B.A., is the Principal of Cowan & Taylor, Barristers & Solicitors which practises in the areas of business and real-estate law. Cowan appears in Your Money every other week. E-mail jeff@cowanandtaylor.comor call 416-363-5046 with questions for future columns. The information contained in this article should not be relied upon as legal advice.
