Plan for year to come, get your books in order
It’s time to consider resolutions for the coming year when it comes to the legal health of our businesses. Here are some items to consider:
Dec. 31: Many companies have this date as their fiscal year end. As a matter of regular business practice, you or your corporate solicitor should have drafted the annual resolutions for your company. This is a relatively painless process that addresses issues such as re-appointing officers and directors for the coming year, approval of any shareholder dividends or major financial transactions, appointment of accountants and general recording of any decisions or activities in the past year (or in the year to come). Draft them, sign them and insert into the minute book.
Record keeping: At this time, perhaps you should examine your company’s books. Under the Ontario Business Corporations Act, a corporation is required to maintain a minute book to record the activities of the company on an ongoing basis; many small companies do not keep these documents updated.
Audit documents: Growing companies will often develop and use contracts and agreements that suit their purposes at the time of use. However, companies change and grow and their legal requirements shift with their growth. Now is the time for companies to audit their documents and make sure they accurately reflect the legal needs of the business.
Incorporate?: For those who operate as a sole proprietorship, now may be the time to incorporate that entity to address changing tax or liability issues.
Get adviser: Lastly, now may be the time for fledgling businesses to consider developing a relationship with an experienced corporate/commercial lawyer who can be an invaluable legal resource as well as a useful business adviser.
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 firstname.lastname@example.org call 416-363-5046 with questions for future columns. The information contained in this article should not be relied upon as legal advice.