Your business is going great. Money is flowing in, employees and customers are happy, and your relationships with your business partners and community couldn’t be better. And then one day, as you’re tidying up your office, you knock over a dusty old book with your company’s name on it, a bunch of old documents within, and a “corporate seal” that you’ve never seen, let alone used.
It turns out you’ve found your minute book! And rather than gathering dust, it should have been gathering the story of your business. Because that’s what we use minute books for, and why the government expects you to keep an up-to-date record within it. These books should contain the articles of incorporation, the by-laws of the company, records of any major transactions, lists of the directors, officers, and shareholders, and records of the meetings of the directors and shareholders of the company. These are not books you’ll pick up and go over every day, but they are something that you want to make sure captures an accurate picture of your business if the government ever comes knocking.
That’s where we come in. Corporate lawyers in our group can take a minute book, even one that hasn’t been shown much love over the years, and help you assess where the deficiencies are, what your ongoing responsibilities will be, and how we can update the book to bring you back into compliance with government requirements. And once we’ve helped bring it back up to speed, we are also here to help with annual updates and minute book storage so that you don’t find yourself falling behind again.
The more skeptical readers may be wondering what the actual consequences are of not keeping an up-to-date book, and whether you’re getting a real value from our assistance. In terms of consequences, failing to keep an up-to-date book could result in:
- Involuntary dissolution of the company
- Significant penalties and fines
- Audit by the CRA
- Monetary penalties for directors of the company
- Delays in responses from certain government agencies
- Difficulties in selling, financing, or re-organizing the company
- More time and legal fees spent in trying to compile past documents down the road
- Legal difficulties from failing to keep an up-to-date register of directors, officers, and shareholders
- Difficulties in undoing past corporate acts, because of inadequate documentation
If you do decide to update and store your book with us, you can be sure that the minute book will be stored safely, the documents in it will be accurate and compliant with the law, and that updates will be completed in a timely fashion. On balance you’re reducing a lot of unnecessary legal risk, and creating a more certain and stable legal foundation for your business.
Please do not hesitate to contact me or any other member of the business law group for more information on how we can assist with your minute book.
Associate – Business Law Group
Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.