The very first documents that are included in the minute book are called the “organizational documents of the company”. The documents that will be prepared and inserted in the minute book will be:
General Operating By-law
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
A general operating by-law in most cases sets out the provisions of the statute governing the company but some of those provisions can be varied for the particular circumstances.
All companies must have a general operating by-law which is enacted by the directors and confirmed by the shareholders. If you obtain a general operating by-law for your company you will be able to determine how to conduct business properly.
If meetings are held that violate the legal requirements for a meeting you could have issues with this in the future and in particular, in the case where a director or shareholder is objecting to an approval that was put through. If the approval at a meeting was not documented or documented incorrectly it could invalidate that approval and you may be forced to set aside that resolution.
In some provinces, the general operating by-law provisions are included as part of the Articles of the company in a document called a Memorandum of Association.
Borrowing By-law
This by-law provides who has authority to borrow on behalf of the company and normally provides for the directors and officers to have this right. Banks frequently wish to see this by-law if the company wishes to borrow money.
First Directors Resolutions
The individuals who agreed to be the first directors on the articles of incorporation have a legal obligation to approve certain things right after incorporation including:
Appointing the officers
Allotting shares and confirming the amount paid for those shares
Enacting the general operating by-law
Once the first director has approved these matters he can then resign if he wishes or he can continue as a director of the company.
First Shareholders Meetings
There cannot be a first shareholders meeting until the shares have been allotted. As indicated above the first directors allot the shares to the shareholders. A shareholder (owner of a company) does not have to be a director and a director does not have to be a shareholder, however, frequently the owners of a company also wish to manage the company so they will be both a shareholder and a director. Some of the items approved at the first shareholders meeting are:
Determine how many directors there will be
Appoint the Auditor or the Accountant
Accept any resignations of the first directors and confirms the appointment of all directors
Consent to Act of directors – Directors need to consent to act as directors and this consent must be signed and inserted into the minute book of the company. This ensures that a director is not elected to the board of directors and his name is not put on the public record without his or her consent.
Exemption from Appointment of an Auditor
Most private companies are not required to have audited books. However, in many cases, the statute governing the Canadian company will require that the shareholders approve an audit not being performed.
Registers
All statutes have a requirement that registers be prepared for a company. The registers you will find in a minute book are:
Directors Register
lists the dates of appointment and resignation of each of the directors and their addresses
Officer Register – lists the dates of appointment and resignation of each of the officers, the positions they hold in the company (i.e. President, Secretary, Vice-President) and their addresses
Shareholder Register – lists all of the individuals or companies that hold shares in the company, the number of shares they own and the date they received those shares. It also records when shares are returned to the company or transferred to other individuals or companies
Shareholder Ledgers – Each shareholder will have a ledger showing the date upon which he or it received shares, how many shares were allotted and the reason why those shares were allotted. It will also show when those shares are transferred to others, if applicable.
Forms
All companies must file returns with the particular Canadian government under which they are incorporated. When changes to directors and officers occur the government will expect you to provide them with an amended form showing all current addresses. This section of the minute book contains a record of all filings made to the government. It does not typically contain tax returns but you can store any documents you wish in a minute book.
Share Certificates
Every shareholder has a right to a share certificate. This certificate evidences ownership. If you have not set up a minute book for your company you will not have any proof of ownership.
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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
Bylaws
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
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