This article is part 2 of the minute book series, if you have not organized a minute book, please refer back to the previous post which can be found at https://thesocialparalegal.wordpress.com/2019/12/09/wait-a-minute-you-need-a-book-for-that-part-1/ .
Small business owners often believe the initial set up of the minute book is sufficient; however, there are a number of changes that require accurate documentation in addition to the annual resolutions including:
- appointment/ resignation of directors / officers;
- changes in the registered office address of the corporation;
- the addresses of directors;
- change in officers and shareholders (and changes in their addresses);
- issuance and transfers of shares;
- address changes for directors and officers, registered office (these also require filings);
- Articles of Amendment; and
- Unanimous Shareholder Agreements
There are consequences for corporations that fail to maintain an updated minute book, including but not limited to:
- Being in default of mandatory government notice filings (this may result in cancellation of the corporation’s charter for non-compliance);
- Having no actual owners of your business;
- Being exposed to significant fines or penalties;
- Directors being held monetarily accountable for non- compliance, failure to maintain proper corporate records and filing appropriate government documents;
- Canada Revenue Agency audit;
- Delays when undergoing a C.R.A audit;
- Previous directors being responsible for actions taken by succeeding directors (if resignations are not documented appropriately);
- Unable to secure funding: including loans or investment;
- Additional legal fees to accumulate past corporate records that were inaccurately documented; and
- New officers and directors will not have access to past records and be less informed of the business changes
Why have a legal professional manage your minute book maintenance?
- Experts will have the appropriate knowledge to maintain your book
- You can leave your minute book at their office and know the book is safe
- Updates will be completed correctly and at appropriate times
- You will have someone to explain the necessary legal steps to upkeep your minute book
Contact TSP to maintain your minute book today!
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