Corporate Record Maintenance
The Hows and Whys of Keeping a
Corporation’s Minute Book Up to Date
April 2014
by Jenna Rucas,
Associate
Corporate and Commercial
Securities and Corporate
Finance
Commercial Leasing
Employment
Corporate record maintenance may be
the last thing on a business owner's
sufficient fact finding has occurred,
appropriate details are discovered and
mind. Business owners are focussed
on running the ins and outs of the
business and on making their venture
the minute book is updated. In
unfortunate circumstances, the minute
book may become difficult to update if
profitable; they are not often concerned
with updating the corporation's minute
a shareholder has died or disappeared
or if shareholders have since parted
book to reflect the current state of affairs.
ways. Where a relationship between
shareholders has become contentious,
a complete and accurate corporate
In the course of a corporation's life
cycle, many things can occur. Officers
and directors of the corporation may
come and go, accountants will prepare
financial statements for various fiscal
periods, a corporation may change its
registered address, and the
shareholders of the corporation may
change over time. According to both
Ontario and federal corporate
legislation, each of these events ought
to be recorded in the corporation's
minute book in a specific way and
certain events must be reported to
either the Ontario or federal
government, depending on which
statute governs the corporation.
It may not be a business owner's
priority to ensure that these types of
events are recorded. However, when
the time comes for a shareholder to
sell its shares in the corporation, or for
record can avoid the claim that one
shareholder or director was unaware
that the corporation was taking certain
actions, especially where such
shareholder or director has signed off
on such actions. Additionally, noncompliance with the corporation's
governing statute could result in fines
being issued to the corporation. In
short, keeping the corporate records of
a corporation up to date is both legally
required and provides certainty in
many critical situations.
What follows is a list of typical items
that should regularly form part of an
Ontario corporation’s records and
which records should be kept in the
corporation’s minute book.
• Annual shareholders meetings.
The Ontario corporate statute
the corporation to obtain a loan from
the bank, if the corporation's minute
provides that a corporation must
hold a shareholders meeting
book is not up to date, the transaction
may be delayed until such time as
annually, at which meeting the
directors of the corporation are
elected, financial statements for
the preceding year are presented
appoint auditors until the
shareholders are able to meet and
to the shareholders by the
directors, and either auditors for
the corporation are appointed or
make such decision, and make
banking arrangements for the
corporation. Thereafter, directors
the shareholders agree to exempt
the corporation from the auditor
meetings may occur periodically
throughout the year, but for smaller
requirements set out in the
statute. These are commonly
called annual resolutions. Minutes
corporations, often occur annually
in order to appoint officers and
approve the financial statements
of each shareholders meeting
should be recorded and kept in
for the preceding year. Similar to
shareholders meetings, minutes of
the corporation’s minute book. For
some small companies, there may
only be one or two shareholders
each directors meeting should be
recorded and kept in the
corporation’s minute book.
for whom the transaction of such
business does not warrant an
Alternatively, directors are permitted
to sign resolutions in writing setting
actual meeting. In such cases, the
statute provides that in lieu of an
actual meeting, shareholders are
out the information above in lieu of
a meeting, provided such
resolutions are signed by all of the
permitted to sign resolutions in
writing approving the annual
directors of the corporation.
resolutions, provided that such
resolutions are signed by all of
the shareholders of the
corporation. Where special
meetings of the shareholders are
held in between annual meetings
in order to transact special
business, minutes of such
meetings or resolutions in writing
in lieu thereof should also form
part of the corporation’s records.
• Directors meetings. After
incorporation, the directors of a
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• Government filings under the
Corporations Information Act
(Ontario). Once a corporation is
incorporated under Ontario law,
the government requires the
corporation to file an Initial Return
within 60 days of incorporation
which sets out the registered
address for the corporation, the
directors of the corporation and
the top 5 officers of the
corporation. Each time a change
to this information occurs, a Notice
of Change form is required to be
corporation are required to meet in
order to enact by-laws for the
filed within 15 days of such
change. Each year, an Annual
corporation, adopt a form of share
certificate (where required by the
shareholders), appoint officers,
Return must be filed for the
corporation which either re-affirms
the information presently on file
with the government, or provides
updated information regarding any
maintain a register which records
all of the transfers of securities for
change to the information above.
The Annual Return may be filed
by the corporation’s accountants
the corporation. All of the registers
must be kept up to date in the
corporation’s minute book.
together with the corporation’s
corporate tax return, or it can be
filed independently. A copy of all
such filings should be kept in the
corporation’s minute book for
completeness and easy reference.
Contravention of the Corporations
Information Act (Ontario) can result
in a fine to a corporation of up to
$25,000, and the inability for a
corporation to maintain a
proceeding in an Ontario court until
such contravention is remedied.
on tax advantageous methods
and times to draw funds from the
corporation. Accountants may, for
example, advise that it is a good
time to have shareholders draw
dividends or designate
management bonuses to certain
individuals. Recording such
matters in the corporation’s minute
book serves as evidence that such
• Directors and securities registers.
Ontario corporate legislation
matters were authorized by the
corporation’s directors and ought to
have occurred, and ultimately
requires that a corporation
maintain a register of directors
serves as support for the tax return
filed for the corporation. If in the
which includes a list of both past
and current directors together with
their addresses, and the date
future the corporation is audited,
properly recorded resolutions
maintained in the corporation’s
when each such director became
and ceased to be a director of the
minute book will assist in proving
that all matters reported in
corporation. This information may
become critical in the event that
an issue of director liability arises
connection with the corporation’s
tax position were sanctioned.
during a specific time period.
Ontario corporate legislation also
requires the corporation to
maintain a register which records
the securities issued by the
corporation, including each
security holder’s name, address,
number and class of securities
issued to the security holder, and
the date of each such issuance.
The corporation must also
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• Drawing on funds. Corporations
depend on accountants to advise
• Significant transactions.
Corporations engage in and
approve various transactions and
incur financial obligations which
should be documented in the
corporation’s minute book. Some
such transactions may include
purchases and sales of shares in
the capital of the corporation,
purchases and sales of shares in
the capital of other corporations by
the corporation, and loans to or
from the corporation. In fact, where
a bank loans funds to a
corporation, it will often ask for
evidence in the form of a resolution
that the corporation’s directors
have approved the borrowing to
ensure the loan transaction was
properly authorized.
A corporation's minute book is a story
of its life from beginning (incorporation)
to end (dissolution). A minute book’s
currency and accuracy are both relied
upon by third parties like purchasers,
lenders and accountants and perhaps
most importantly, are required by law.
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and developments. This article provides general and summary information and should not
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