Why Your Company Needs to Have A Minute Book

Corporations are required by law to maintain up-to-date minute books. Keeping these records updated is crucial, as various entities, including government agencies, lawyers, and accountants, may need to access them for several reasons, such as:

• Your business is undergoing a CRA audit.
• A tax advisor requires information for tax planning or financial advice.
• You are in the process of transferring ownership of the company or its assets.
• Your corporation seeks loans, financing, or investors.
• A shareholder intends to sell shares.
• You are either selling the company or establishing a new corporation.
• You need to modify the articles of incorporation.
• Proof of ownership is necessary for real estate transactions.

• What is a minute book ?
• Do I need a minute book?
• What should be included in a minute book?
• What are the Articles of Incorporation?
• What are the initial resolutions?
• What types of ledgers and registries are included in a corporate minute book?
• How often do I need to update my minute book?
• What should I do if I need a minute book for my company but don’t have one yet?
• FAQ

A corporate minute book is fundamentally a compilation of key corporate documents, including the articles of incorporation, which can be accessed by the corporation’s shareholders and creditors. This minute book can be a physical binder housing all necessary documents, typically located at the corporation’s head office or with its lawyer or notary. Alternatively, your corporation may opt to maintain its minute book online for easier sharing, which is our preferred approach at HMD Avocats.

Yes, you absolutely do. Many entrepreneurs often view the purchase or creation of a minute book at the start of their business as a waste of time and resources. However, establishing a well-maintained minute book from the beginning is crucial for your business’s success.

Both Quebec and Canadian federal laws mandate that businesses maintain an accurate record book at their head office. These regulations not only require you to have a corporate minute book but also stipulate that it must be regularly updated to reflect any changes within the business.

The Articles of Incorporation are the official documents filed with the Provincial or Federal Enterprise Registries, containing the following information:

• The corporation’s name and any alternative names
• The complete registered address of the corporation’s head office
• The number of directors on the board
• The full names and addresses of the board members
• The full names and addresses of the shareholders
• Details about the share capital (e.g., share classes, voting rights)
• Any restrictions on the transfer of shares or securities
• Limitations on the corporation’s activities
• Additional provisions
• The full name and signature of the business founders.

The initial resolutions in the minute book are crucial. They consist of two sets: one approved by the Board of Directors and another specifically for the shareholders.

In the first set of resolutions from the Board of Directors, the members will:

• Approve the Articles of Incorporation
• Adopt the Corporation’s Book of Records
• Establish the General By-Laws
• Confirm the corporation’s head office and judicial district
• Accept share subscriptions from shareholders
• Issue share certificates to shareholders
• Determine the financial year-end
• Establish a banking resolution
• Appoint the corporation’s officers and their key roles (e.g., President, Vice-President, Treasurer, Secretary)

In the first set of shareholder resolutions, the shareholders will:

• Ratify the corporation’s By-Laws
• Elect the Board of Directors
• Appoint an Auditor for the corporation
• Designate an Accountant for the corporation.

A corporate minute book will contain the following ledgers and registries:

• Directors’ Ledger: This records the members of the board of directors, noting their appointment dates and when they left the board.

• Officers’ Ledger: This lists the corporation’s officers, including their appointment dates and when they ended their roles.

• Shareholders’ Ledger: This documents the shareholders, detailing when shares were issued to them and when they ceased to be shareholders.

• Securities Registry: This includes a ledger that specifies the number of shares each shareholder holds, the class of those shares, and the amount paid for each share.

Maintaining a corporate minute book is a legal obligation that requires regular updates and documentation of significant events, such as changes in directors, officers, or shareholders, as well as alterations to the registered office location. Additionally, at least once a year, important actions must be recorded, including the appointment of directors, officers, and accountants for the upcoming year, approval of the previous year’s financial statements, declaration of dividends, management bonuses, and any shareholder loans, along with any other relevant developments like share transfers that may not have been previously noted.

FAQ