Every corporation in Canada is required to maintain an official record of its activities including records of any annual meetings conducted by the directors and shareholders of the company as well as any change within the corporation such as any change of address, changes in directors, shareholders and/or officers, etc. Such record is normally kept in a book called a “Minute Book”. A Minute Book is typically one of the first documents reviewed when a corporation is seeking to partake in various business transactions, such as selling the company or getting a loan, making it one of the most important books of every corporation.
A corporate minute book is used to store all important corporate documents such as the articles of incorporation, the minutes of shareholders and directors meetings, stock certificates, tax filings, by-laws, and other legal documents.
A corporate minute book includes:
- Articles of Incorporation;
- resolutions of directors and shareholders and meeting minutes;
- registers of directors, officers, and shareholders;
- shareholders’ ledger;
- forms filed;
- share certificates; and
- shareholders’ agreement(s) (if any).
Articles of Incorporation
When a company seeks to incorporate (federally or provincially), it must file its Articles of Incorporation with the government. The Articles of Incorporation outline the company’s name, registered address, number of directors, name, and address of the company’s directors, object/purpose of the corporation, number of shares, voting rights, restrictions on transfer of shares, etc. The Articles of Incorporation act as proof of the company’s business registration.
What Information Is Typically Contained in the Articles of Incorporation?
- The full legal name of the corporation (from the name search report).
- The full address of the registered office of the corporation (cannot be a PO box).
- The number of directors (can be fixed or a minimum and a maximum).
- The full names and addresses of each of the founding directors. (For a federal or Ontario provincial incorporation at least 25% of the directors must be resident Canadians, or if less than four directors at least one must be a resident Canadian.)
- Restrictions on the business activities of the corporation or powers that the corporation may exercise. For example, “The business of the corporation shall be limited to the sales and service of motor vehicles”.
- The classes of shares and the maximum number of each class of share that can be issued. Shares are typically given descriptions such as Common, Class A, Class B, Preferred, or other such designations.
- The rights, privileges, and restrictions of each class of shares. For example, a class of shares may be described as “Non-Voting”, meaning that owners of the shares cannot participate in activities such as the election of directors. Shares may also have a designated fraction of voting rights, for example, 1/10th of a vote per share. Preferred shareholders normally enjoy a preferential right to dividends and return on capital in the case of dissolution of the corporation (greater than holders of common shares but less than bondholders).
- Restrictions (if any) on the issue, transfer, or ownership of shares.
- Provisions or restrictions on the borrowing powers of the directors. For example, “The Board of Directors is authorized to borrow money or mortgage property as security for any debt or liability of the Company”.
- Additional articles as required, such as proxy voting requirements, majority voting rules, etc.
- Full names and signatures of the incorporators.
Corporate by-laws are used by companies to organize their internal management. The by-laws set out obligations and rules pertaining to the company’s shareholders, officers, and directors. It is important for any corporation to verify that any business it purports to conduct is consistent with its by-laws, otherwise, the by-laws must be amended before the company can proceed with such business.
A by-law is a list of rules. Some of the things that you will find in a by-law are:
How many people must attend at directors and shareholders meetings for the meeting to be validly called
What the procedure is for calling directors and shareholders meetings to ensure it is a valid legal meeting
How many votes are required to approve an item of business at a directors or shareholders meeting
Which directors and officers can sign agreements on behalf of the company and obligate and bind the company under those agreements
What is the procedure for removing a director or officer of a company
How is an officer or director replaced or new officers and directors appointed
Who can borrow money upon the credit of the company
Resolutions of Directors and Shareholders and Meeting Minutes
Upon incorporation of a company, the company’s directors and shareholders must make key decisions pertaining to the initial organization of the company such as the company’s financial year-end, the company’s bank, auditor, etc. These key decisions are typically memorialized in resolutions. In order to pass such resolutions, directors and shareholders normally hold annual meetings; however, some companies choose to pass written resolutions in lieu of a meeting. Directors and shareholders must also pass certain resolutions at the end of each financial year of the corporation. Annual resolutions generally deal with the adoption of financial statements, appointment of directors and auditors as well as recording any other change in the company that may have taken place prior to the end of the company’s financial year.
If a company conducts any special business between annual meetings, special resolutions must be passed by the shareholders and/or directors to approve such special business.
Registers of Directors, Officers, and Shareholders
A Minute Book is required to contain a register of directors, officers, and shareholders of the corporation. These registers maintain a log of all of the directors, officers, and shareholders of the corporation since incorporation.
A shareholders’ ledger is a document that identifies each shareholder of the corporation and indicates how many shares such shareholder owns. The ledger also documents when a shareholder took ownership of the company’s shares and includes any information relating to any sales or transfers of such shares.
Copies of any documents or forms filed with governmental authorities such as corporate initial and annual filings, trademark applications, tax reliefs, etc. must be kept in the Minute Book.
A share certificate is a certificate issued by a corporation to every shareholder certifying that such shareholder is the registered owner of shares in the company.
A shareholders’ agreement is a contract between all (or some) of the shareholders of a company that structures the relationship between the shareholders. The agreement is an invaluable resource for all companies because it provides the foundation for how the shareholders interact with one another as well as the upper management of the corporation.
Company Formations offers personalized Canada Corporate Minute Books in 1 hour for Only $39. Our Corporate Minute Book includes:
- Organizational Resolutions
- Register of Directors
- Resignation of Director Form
- Appointment of Corporate Officers
- Resignation of Officer Form
- Subscription of Shares
- Share Certificate
- Register of Shareholders
- Consent and waiver for allotment of shares
- Directors’ resolutions approving the allotment of shares
- Consent and waiver for transfer of shares.
- Shares Transfer Form
- Directors’ Resolutions Approving Transfer of Shares
- Notice of Organizational Meeting of Incorporators and Directors
- Waiver of Notice of Meeting of Incorporators and Directors
- Minutes of Organizational Meeting of Board of Directors
- Waiver of Notice First Meeting of Shareholders
- Minutes First Meeting of Shareholders
- Notice to Directors of Regular Board Meeting
- Minutes Shareholders Annual Meeting
- Minutes Regular Board Meeting