What is a Minute Book and Why Do All Corporations Need One?

If you’re incorporating your business, you’ve probably come across the term minute book. But what exactly is a minute book, and why do you need one? We’re here to answer any questions you may have about minute books and incorporation documents.

What is an incorporation?

When you incorporate your business, it becomes a separate legal entity, holding similar rights as a person in terms of liability and protection of assets. You’ll need to decide whether you want to incorporate federally or provincially, depending on where you intend to conduct your business. Then the articles of incorporation will need to be written up, and the shareholders of the corporation named. Once your business is incorporated, limited liability will be in effect, meaning that the company’s assets will be completely separate from the owners and investors.

What are the benefits of starting a corporation?

Unlike a sole proprietorship or partnership structure, the main benefit of incorporating your business is that it becomes separate from you as an individual. This will mean that the owner(s) of the company cannot be held legally responsible for any of the debts your company may incur in the course of business. However, if you made personal guarantees in order to receive funding for your business, your personal assets may be seized if you are unable to pay back your debts. Limited liability can allow corporations to make riskier business moves because the shareholders are protected.

Another benefit of incorporating your business is that it makes it easier to transfer ownership than if you have a sole proprietorship or partnership. An incorporated company will also have a lower tax rate and more lenient tax restrictions.

What is a minute book?

A corporate minute book is essentially a collection of all important corporate records, including the articles of incorporation, which the corporation’s shareholders and creditors can access. A minute book may be a physical binder containing all of the required documents, or your corporation may choose to keep their corporate minute book online for easy sharing.

What does a corporate minute book include?

A corporation is required to maintain records to be viewed by shareholders and creditors upon request. The required documents include:

  • Articles of amendment
  • Bylaws and amendments
  • Unanimous shareholder agreements
  • Minutes of meetings and shareholder resolutions
  • Notices filed
  • A share register with shareholder names and addresses and details of the shares held
  • A securities register

It sounds like a lot, but when you incorporate your business with Ownr, we’ll provide all of the corporate formation documents you need. These include:

  • First Directors Resolution
  • Director Consent(s)
  • First Shareholders Resolution
  • Notice(s) of Issuance
  • Subscription for Shares
  • Securities Register
  • Directors Register
  • Officers Register
  • Shareholders Ledger
  • Bylaws

If you need any answers to questions about the specific documents Ownr provides, you can call, email, or use our online chat feature to get in contact.

What are the benefits of keeping a minute book?

Keeping an up to date corporate minute book will allow you to keep track of all your important corporate documents in one location. This will also make it easy for you to provide your records to shareholders, creditors, or potential buyers should you choose to sell your corporation.

How to keep your minute book up to date

Not only are corporations required provincially and federally to maintain certain records, but they are also required by law to keep them up to date. When a business is incorporated, no matter how large or small it is, an annual shareholder meeting must be held and documented in the corporate minute book. Failure to hold an annual meeting or to comply with laws on corporate record-keeping can result in consequences including government penalties, tax issues and disruption to the corporation’s daily business.

Many corporations choose to have a lawyer look after their corporate minute book, ensuring all of the documents are updated and in accordance with the law. However, if you want to keep your own minute book, there are some simple organizing tips that might help you. In order to organize your corporation’s minute book and keep it up to date, you can separate your minute book into four different sections. These are:

  • Certificate of Incorporation (and any subsequent amendments)
  • Bylaws (and any subsequent amendments)
  • Board of Directors
    • Minutes from a meeting regarding basic company operations
    • Signed minutes of all meetings
    • Written consents approving actions in between board meetings
  • Stockholders (and actions executed by the requisite majority)

You may also choose to include a list of officers and directors, tax information and other relevant company records.

What else do you need for your corporation?

In addition to keeping your corporate minute book up to date, there are certain other corporate obligations that you will need to comply with in order to stay in good standing with the government after you incorporate your business.

Appointing auditors

At every annual shareholder’s meeting, an auditor must be appointed to audit your corporation’s finances. This helps maintain the reliability of your financial documents and protects and informs shareholders of the company’s financial standing. If your corporation is non-distributing, shareholders can vote not to appoint an auditor.

Preparing financial statements

Your corporation’s financial statements need to be in accordance with accounting principles according to the Chartered Professional Accountants of Canada (CPA).

Sharing financial statements

Financial statements must be provided to shareholders at least 21 days prior to the company’s annual meeting.

Filing an annual return

As long as your corporation is active, you will be required to file a yearly return with Corporations Canada. This is separate from your company’s tax returns filed through the Canada Revenue Agency. Your return must be signed by an individual authorized by the board of directors with relevant knowledge of the company. This return is necessary in order for Corporations Canada to ensure that your corporation is in compliance with the CBCA requirements. The return must be submitted within 60 days of the date on which the corporation was created. This date will be listed on your certificate of incorporation. Failure to file your return on time will result in your corporation being unable to obtain a certificate of compliance.

*This only applies to a federal corporation, so make sure you check the requirements for a provincial corporation depending on where you’re located.

Filing a change of registered address

Your office address needs to be kept up to date as it is the official address for communications to be sent to your corporation. Corporations Canada requires you to inform them within 15 days of a change of registered office address. You can change your address within its original province or territory online, but you will be required to file articles of the amendment if you choose to move your office into another province or territory than the one set out in your articles of incorporation.

*This only applies to a federal corporation, so make sure you check the requirements for a provincial corporation depending on where you’re located.

Filing change in directors

Corporations Canada requires corporations to inform them within 15 days when new directors are elected, or individuals cease to be directors. Any change in the address of your directors must also be submitted to Corporations Canada within 15 days. This address can be residential or a business address. Your current directors (and their contact information) should also be regularly available to people who are considering becoming stakeholders in your corporation.

It’s also worthwhile to note that if the number of directors of your corporation changes, you will need to amend your articles (and pay the filing fee) to reflect the change. At least 25% of your corporation’s directors must be resident Canadians.

*This only applies to a federal corporation, so make sure you check the requirements for a provincial corporation depending on where you’re located.

Amending articles

All changes to your official articles of incorporation must be kept along with the rest of your corporate minute book. These changes may include:

  • Change in business name
  • Change in location of operations
  • Change in number of directors
  • Change in restrictions on share transfers
  • Change in restrictions on business the corporation can conduct
  • Creating or removing classes of shares
  • Modifying classes of shares
  • Increasing or reducing capital (if set out in articles of incorporation)
  • Change of any other provisions in the articles

It may seem a bit overwhelming when you’re first starting your new business, but the sooner you are able to get your minute book in order, the easier it will be to maintain it (and keep your corporation in good standing) as time goes on.