There are many components to your business success. If your business is incorporated, keeping a corporate minute book is a must. But why should you make this a priority when you are already busy and overwhelmed with day-to-day operations of your business? Can this wait until a later day when you resolve your urgent business questions?
No, it cannot! Why? By law, Ontario and Canadian corporations are required to keep an up-to-date minute book. What can happen if you do not have a minute book as an owner of an incorporated business? The consequences can be devastating. For instance, you may start a business with a friend, business partner, or investor, and properly incorporate it. The start of the business goes smoothly, all parties involved are excited and happy. You invest your life savings in the business and decide with your partner that you each own half of the business. Unfortunately, a large portion of lawsuits starts just like that, with a happy and smooth business inception, but then comes a day when the person you trusted is gone and your business partner claims that the business is his and not co-owned. Without a minute book which serves as the proof of your ownership of business, your money is as good as gone. You have no record that you ever invested your life savings and that you are an equal partner.
So what exactly does a minute book do? It is a record of all your business activities, which defines how the corporation is run and managed and who has a right to claim ownership. The documents contained in your minute book include the articles of incorporation and by-laws, which confirm the existence of your business, determine the structure of your corporation and the rules it is governed by. It includes minutes of meetings, voting, elections and other crucial decisions. If a corporate business does not have an up-to-date corporate minute book, it can be subject to significant fines, possible imprisonment, negative tax implications in accordance with the applicable legislation, and lawsuits. It is strongly advised that business owners obtain legal advice and have their lawyer assist with preparation maintenance of an up-to-date minute book. Buzaker Law Firm team is ready to help you with preparation and safe keeping of a corporate minute book compliant with the law. To book a consultation with our corporate business team, email us at info@vblegal.ca or call 905-370-0484.
