What is a Minute Book?
If you have incorporated your business, whether it is providing pet grooming services or managing or leasing real estate, you are required under provincial legislation (Business Corporations Act, R.S.O. 1990, c. B.16 (the “OBCA”) or federal legislation (Canada Business Corporations Act, R.S.C. 1985, c. C-44 (the “CBCA”)), to maintain certain corporate records. These corporate records are typically kept in a minute book which can either be in a physical loose-leaf binder form or electronic form.
The purpose of a minute book is to provide a complete history of a company and keep all records related to the company in one place for ease of reference and access. It is important for a company to keep its minute book up-to-date on a regular basis.
See below for when you need to update your corporate documents and what you need to do every year to maintain your corporate records.
Documents Contained in the Minute Book:
Articles of Incorporation
The articles of incorporation (and all amendments to them), typically set out (i) the name of the company, (ii) the location of its registered office, (iii) any restrictions on the businesses that the company may carry on, (iv) the number of directors or the minimum and maximum number of directors of the company, (v) the authorized classes and any maximum number of shares, (vi) the rights, privileges, restrictions and conditions attaching to each class of shares, and (vii) if the issue, transfer or ownership of shares of the company are restricted.
The directors of the company create the by-laws (unless otherwise provided in the articles, by-laws or any unanimous shareholder agreement). The by-laws will regulate the business and affairs of the company.
The minute book must contain all minutes and resolutions of the company, including director organizational resolutions, shareholder organizational resolutions, minutes or resolutions of the directors, and minutes or resolutions of the shareholders.
Under provincial or federal legislation, the company is required to file certain forms with the Ministry of Government and Consumer Services or Innovation, Science and Economic Development Canada (the “Ministry”). When a company is incorporated or amalgamated, it must either file a Form 1 Initial Return (under the OBCA) or a Form 2 Initial Registered Office Address and First Board of Directors (under the CBCA).
It is important to keep these records up-to-date by filing a Form 1 Notice of Change (under the OBCA) or Form 3 Change of Registered Office Address/Form 6 Changes Regarding Directors (under the CBCA) when necessary.
The shares of the company are represented by a share certificate. Each share certificate will indicate the name of the owner of the shares, the number of shares owned, and the class of shares.
Registers and Ledgers
The following are required to be included in the minute book: Directors’ Register, Officers’ Register, Shareholders’ Register, Shareholders’ Ledger and Share Transfer Register. The Directors’ Register and Officers’ Register will typically set out the name(s) and address(es) of each director/officer, the date they became a director/officer, and the date they ceased to be a director/officer (if applicable). The Shareholders’ Register and Ledger will typically set out the name(s) and address(es) of each person who is or has been a shareholder, the number and class of shares held by such person, and the date of issue and transfer of each share. Lastly, the Share Transfer Register will typically set out each share transfer by including the transfer number, the date on which the transfer occurred, the share certificate surrendered, the name of the transferor, the name of the transferee, and the new certificate issued (if applicable).
Real Property Register
In Ontario, the minute book must include a register of a company’s ownership interest of land in Ontario (OBCA, s. 140.1) and must be kept at the registered office of the company. Along with the register, the company must maintain a copy of any transfers that contain any of the following with respect to each property listed in the register: (i) municipal address, (ii) registry or land titles division and the property identifier number, (iii) the legal description, and (iv) assessment roll number.
As a reminder, failure to comply with any provision of the OBCA is an offence and could result in officers/directors of a company being liable for fines of up to $2,000, imprisonment for up to one year, or a combination of the foregoing, or the company being held liable for fines of up to $25,000 (OBCA, s. 258(1)).
On January 1, 2023, amendments to the OBCA came into effect, requiring private Ontario companies to create and maintain a register of all “individuals with significant control” over the company (OBCA, s. 140.2). An “individual with significant control” over a company means an individual that holds a 25% + interest in the company or who have direct/indirect influence over the company.
What Do I Need to Complete Every Year?
Every year, the company must prepare annual resolutions that confirm (i) the company’s financial statements, (ii) the appointment of officers, (iii) the election of directors, (iv) the appointment of the company’s accountants, (v) the confirmation of all acts, and (vi) the exemption from audit requirements.
In addition to the annual resolutions, every company is required to file an annual return with the Ministry within six (6) months after the end of its tax year. The annual return discloses certain basic information about the company, such as its legal name, mailing address and information about its directors and officers.
Failing to file the Annual Return for your company may result in fines, penalties or in certain cases, the dissolution of your company!
When Do I Need to Update Documents?
As previously mentioned, if you are making any changes to the directors, officers or registered office of the company, you must prepare the appropriate corporate resolutions and file the necessary forms (see above under Forms Filed).
In addition to the above, and as a general note, it is always important to keep the company’s records up-to-date, as the minute book is essentially the company’s story book – anything that happens within the company should be documented, whether that is issuing dividends, issuing new shares from Treasury, buying and selling shares or transferring shares, or updating the registers and ledgers when required.
This blog is intended for general informational and non-commercial purposes only and should not be relied upon as legal advice.