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What is a Minute Book and Do You Need One?

What is a Minute Book?

A corporate minute book is a permanent and detailed record of your corporation’s rules, activities and decisions. Notably, it is used as a vehicle for the organization and storage of all your corporation’s documents. Typically, the corporate minute book is accessible at the head office of the Corporation or at the Corporation’s lawyer or notary’s office.

Do You Need a Corporate Minute Book?

Yes, you do. Often times, most entrepreneurs feel that purchasing and/or creating a minute book at the start of their business is both a waste of time and money. However, having a proper minute book from the start of your business that is regularly updated can be vital to the success of your business.

First and foremost, both the Quebec laws and Canadian federal laws require businesses to maintain, at their head office, a proper book of records. The laws not only require that you have a corporate minute book but also that this book is properly updated reflecting the changes made in the business.

 

Secondly, once your business grows, several events can happen that will require an up to date minute book, namely and not exhaustively:

  • Visiting a Professional (ex. accountant, lawyer or notary)

  • Selling Your Business

  • Joint Venture

  • Government Audit

  • Securing Funding

In all these cases, the business or person whom you will be transacting with will ask to see a copy of your minute book. Therefore, it is important to have your book consistently up to date to ensure that you do not lose out on a potential deal due to disorganization.

 

What is included in a minute book?

Once a corporation is constituted, it is important that the corporation prepare all its first organizational documents and input these documents into its minute book, namely:

  1. Articles of Incorporation

The Articles of Incorporation are the legal documents submitted to the Provincial and or Federal Enterprise Registries that include the following:

  • The Name of the Corporation and the “other versions” of the name

  • The full registered head office address of the Corporation

  • The number of directors in the Corporation

  • The full names and addresses of the board of directors

  • The full names and addresses of the shareholders

  • The description of the share capital (ex. share class, voting rights…etc.)

  • Restrictions on the transfer of securities or shares

  • Limits on the activities of the corporation

  • Other provisions

  • Full name and signature of the founders of the business

 

  1. General By-Law

The General By-Law of the Corporation will stipulate how the corporation will be operating and what procedure it will be following. For instance, some of the procedures that are outlined in the general by-law of the corporation are:

  • How many people must attend the board of directors and shareholders meeting to vote?

  • What procedure will be used to call directors and shareholders to a meeting?

  • How many votes are required to approve an item at the meeting of the board of directors or shareholders meeting?

  • Which director and officer can sign on behalf of the corporation and legally bind the corporation?

  • How do you remove an officer or a director from their role?

  • How can you replace an officer or director?

  • How can you appoint a new officer or director?

  • Who can borrow money upon credit of the corporation?

The general operating by-law will set out the procedure to govern and take decisions in the corporation. It can vary from corporation to corporation.

It is important to note that corporations will be held accountable to follow the rules and regulations set out in their by-laws. Therefore, if a decision is taken at a board of directors or shareholders’ meeting where there was not quorum as per the by-law, then that decision can be struck down. Directors and Shareholders must also ensure that all decisions taken in the corporation are properly documented in the minute book by way of a resolution.

 

  1. Borrowing By-Law

The Borrowing By-Law will stipulate who has the authority in the Corporation to borrow on behalf of the Corporation. Typically, it will be either a director or officer of the Corporation who will hold the right.

In the event where a Corporation wishes to borrow money from a bank, the bank will typically request a copy of this by-law.

 

  1. First Board of Directors Resolutions

In the first Board of Directors Resolutions, the members of the board directors will:

  • Accept the Articles of Incorporation

  • Adopt the Book of Records of the Corporation

  • Adopt the General By-laws

  • Confirm the head office of the corporation along with the judicial district

  • Accept the share subscriptions by the shareholders

  • Issue the share certificates to the shareholders

  • Adopt a financial year end

  • Adopt a banking resolution

  • Appoint the Officers of the Corporation and their significant position (ex. President, Vice-President, Treasurer, Secretary)

 

  1. First Shareholders Resolutions

In the first Board of Directors Resolutions, the shareholders will:

  • Ratify the By-Laws of the Corporation

  • Elect the Board of Directors

  • Appoint an Auditor for the Corporation

  • Appoint an Accountant for the Corporation

 

  1. Consent to Act of the Board of Directors

The Initial documents in the minute book will include a consent to act of the Board of Directors on behalf of the appointed Directors. This ensures that a Director is not appointed and his or her name is not on the public record without their consent.

 

  1. List of the Board of Directors

The initial organizational documents in the minute book will include a list of the board of directors’ members along with the day they were appointed.

 

  1. List of the Officers and their Positions

The initial organizational documents in the minute book will include a list of the officers, their significant position along with the day they were appointed.

 

  1. List of the Shareholders

The initial organizational documents in the minute book will include a list of the shareholders in the Corporation along with the date they became a shareholder.

 

  1. Shareholder Ledger

The minute book will include a shareholder Ledger which will stipulate how many shares each share holder has, the class of that shares and the amount paid per share.

Lisa Joli, Class A, 100 Shares

 

11. Share Certificates

Each shareholder will obtain a share certificate evidencing their ownership of the shares in the business.

 

  1. Unanimous Shareholder Agreements

If a unanimous shareholder agreement is signed by the shareholders of a Corporation, the agreement will also be included in the book.

 

Maintaining a Corporate Minute Book

After the initial corporation organizational documents are complete and inputted in your corporation’s minute book, it is essential to frequently update your minute book should any changes be made in the organization or in its structure. Some of the changes which will require evidence in the minute book are, namely and not exhaustively:

  1. A New By-Law is Enacted

  2. Amendment to your articles of incorporation

  3. Approval of the yearly financial statements by the Board of Directors and Shareholders

  4. Change of Address

  5. Change of Directors

  6. Change of Officers

  7. Change of Shareholders

  8. Accounting, audit and bonus decisions

  9. Declaration of a dividend in cash or shares

  10. New Shareholder Subscription

  11. Emission of New Share Certificates

  12. Resolutions to Appoint a Representative

  13. Changes to the legal organization

  14. Change of Name

  15. Shareholder Agreement is enacted or modified

  16. Share Transactions (ex. share transfers, share redemptions…etc.)

  17. New Class of Shares is created

  18. Transmission of shares upon death or will

  19. Resolution for the sale of company assets for cash or sale of company shares for cash

  20. Amalgamation of the Corporation

  21. Revival of the Corporation

  22. Dissolution of the Corporation

  23. Liquidation of the Corporation

The above-mentioned list is non exhaustive but includes the large majority of resolutions and decisions that you will find inside of a corporation’s minute book once the corporation begins doing business.

Whenever one of these decisions occurs in a corporation, it is pivotal for the corporation to issue the appropriate resolutions and/or other necessary documents to evidence the decision and input the whole into the corporation’s minute book.

 

Where can you get a proper minute book?

Now that you know the importance of having a minute book along with the documents that can be found in it, you need to know where you can get one.

In most cases, if you incorporate your company with a lawyer or notary, they will most likely provide you with a minute book. Additionally, most law firms also offer a corporate maintenance yearly service to ensure that your minute book is properly up to date every year.

If, however, you constituted the company yourself and have yet to create a minute book, you can contact a lawyer or notary to help you establish the legal paper trail of your business and create a minute book to evidence same.

If you want more information on minute books, you can visit our corporate maintenance page or corporate resolutions page. If you are looking to incorporate a business and would like a minute book from the get-go, you can visit our business incorporation page.