The Corporate Minute Book and Maintenance

By Jonathan Hureau

You may have heard that corporations are required to maintain minute books, but what is a “minute book” and why does a corporation need one?

The simple answer to the first query is that a minute book essentially functions as a “record holder” for a corporation. Amongst other documents and somewhat depending on the jurisdiction of incorporation, it should contain the corporation’s certificate of incorporation, articles of incorporation, by-laws, minutes of meetings of the directors and shareholders including resolutions, registers (e.g. listing directors, officers, and shareholders of the corporation), share certificates, share transfer ledgers, shareholder agreements, any articles of amendment or articles of amalgamation, a register of any ownership interests the corporation has in lands, and a register for individuals with significant control. 

The simple answer to the second query above is that a corporation is required by law to maintain records that comprise the contents of its minute book. This is the case whether the corporation is incorporated federally pursuant to the Canada Business Corporations Act or provincially pursuant to the Business Corporations Act (Ontario). For reference, the Business Corporations Act (Ontario) provides as follows:

140 (1) A corporation shall prepare and maintain, at its registered office or at such other place in Ontario designated by the directors,

(a) the articles and the by-laws and all amendments thereto, and a copy of any unanimous shareholder agreement known to the directors;

(b) minutes of meetings and resolutions of shareholders;

(c) a register of directors in which are set out the names and residence addresses, while directors, including the street and number, if any, and an e-mail address if one is provided, of all persons who are or have been directors of the corporation with the several dates on which each became or ceased to be a director;

(d) a securities register complying with section 141;

(e) a register of ownership interests in land complying with section 140.1; and

(f) a register of individuals with significant control over the corporation complying with section 140.2.

It is worth noting that the minute book of the corporation may be kept in the physical form of a binder or in electronic form under both statutes. The relevant provision of the Business Corporations Act (Ontario) reads as below:

139 (1) Where this Act requires a record to be kept by a corporation, it may be kept in a bound or looseleaf book or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device.

Ongoing Maintenance of a Corporate Minute Book

Regardless of the form in which the minute book is kept, the law mandates that the minute book contents are to be maintained and updated on an ongoing basis. This includes requirements to document a variety of events in the minute book including, but not limited to, changes in the directors, officers, and/or shareholders of the corporation. A change in the location of the registered office of a corporation is another example of an event that would require documentation in the corporation’s minute book by way of a resolution of the directors or shareholders as applicable.

Annual Maintenance

Further, on at least an annual basis the following should be documented in the corporation’s minute book: the appointment of directors, officers, and accountants for the corporation for the ensuing year; the approval of the financial statements for the prior year; the recording of all declared dividends, management bonuses, and shareholder loans of the corporation for the prior year; and any other pertinent developments (e.g. share transfers) occurring during the prior year that may not have been recorded in the minute book to that point.

Summary

Maintaining a minute book is, thus, central to good corporate record keeping. This reality is supported by the fact that the failure to maintain a corporation’s minute book can result in significant negative consequences. For example, in the event a corporation is audited by the Canada Revenue Agency (CRA), the CRA may request to review the corporation’s minute book amongst other records. If a corporation cannot provide such records, it could incur substantial penalties.

At SorbaraLAW, we can help keep your corporation’s minute book up to date on an ongoing and annual basis for reasonable fees. We are also glad to assist with getting outdated and deficient minute books back in shape, or creating a minute book from the beginning should a corporation not have one yet.

Legal Disclaimer: The above article is for informational purposes only. It does not constitute legal advice on any matter or create a solicitor-client relationship.