Last updated: Jan. 10, 2024
Every Canadian incorporated business is required to create and maintain an official record of its activities and transactions, which is known as a minute book.
The Canada Business Corporations Act has established a set of requirements for what must be included in these corporate minute books. As a business owner, understanding and adhering to these requirements should be a priority because your minute books are subject to government review to ensure your corporation is in compliance.
Although keeping a minute book is mandatory, it doesn’t have to be stressful. Here’s what you need to know about creating and maintaining a compliant corporate minute book.
What is a minute book?
A minute book keeps track of important corporate records and documents company decisions, such as dividend payouts; issuance of shares, loans, and mortgages; shareholder agreements; major financial transactions; and payment of bonuses to officers and directors.
The owner of the company, shareholders, and corporate secretary all have a part to play in creating and maintaining these corporate records.
What goes in a minute book?
The specific records included in a minute book will vary from corporation to corporation; however, there are some documents that must be part of every company’s minute book:
- Articles of incorporation
- Board of directors register
- Officers register
- Bylaws and amendments
- Resolutions and annual shareholder meeting minutes
- Share certificates and share transfer registers
- Changes in share structure
- Directors, officers, and shareholder registers
- Notice filings, including:
- Change of registered office address
- Changes regarding directors
- Shareholder agreements
- Details of the corporation’s quarterly and annual financial statements
- Dividends dispersed to owners
- Management fees or bonuses
- Filing periods
Why do minute books matter?
Minute books are important for corporations because they centralize key business records and documentation of significant events, which helps maintain transparency into business activities.
Your minute book also provides proof that you have complied with all mandatory government tax filings, including your annual return, and it may prevent disputes over the issuance of shares, dividends, and shareholder loans.
Failure to create and maintain a corporate minute book can have serious consequences, including:
- Canada Revenue Agency (CRA) audits and fines
- Inability to open a bank account for your incorporated business
- Denial of business loan applications
- Delays in a future sale or transfer of your business or its assets
Because your minute book effectively creates a paper trail of payments made out of the corporation, failure to keep proper records may result in higher taxes, tax penalties, and fines on the shareholder dividends your corporation has paid out.
When might a minute book be requested?
Corporations are required by law to keep their minute books up to date. Complying with this requirement is important because government agencies, lawyers, accountants, or other entities may request access to your business’s minute book for the following reasons:
- The CRA is auditing your business.
- A tax specialist wants to provide tax advice or corporate financial planning.
- You are transferring ownership of your company or its assets.
- Your corporation is looking to obtain loans or financing or investors.
- A shareholder wants to sell shares.
- You are selling the company or forming a new corporation.
- You need to amend the articles of incorporation.
- Real estate transactions require proof of ownership.
What are the benefits of keeping a minute book?
In addition to keeping your corporation in alignment with the CRA’s requirements, your minute book is an efficient way to organize and secure your important business documentation and records. Maintaining an up-to-date, accessible copy of your minute book makes it easy to provide information to shareholders, financial institutions, or potential buyers when requested.
Corporate regulations can be confusing for small business owners and newly incorporated companies, but the FBC team can help you navigate the unknown.
FBC offers Members affordable minute book services, including initial setup or review of your new or existing minute book, return filing for missed returns, and annual maintenance, preparation, and filing so your minute book stays up to date and you stay compliant with your corporate filing obligations.
Request a consultation, and one of our team members will be in touch to learn more about your business challenges and how we can help you solve them.
Many incorporated business owners feel intimidated by the demands of tax season and the corporate filing requirements of the CRA. This is completely natural.
While there are numerous benefits to incorporation, it also comes with complex obligations. The complexity and administrative burden of these requirements leave many businesses struggling to keep up.
That’s why we’ve created The Ultimate Guide to Incorporated Small Business in Canada. Not only will it help you get organized for tax season, but it will help you make sense of your obligations under a corporate structure and to take advantage of the benefits!