Canadian Corporate Minute Book

CCPC Annual Registration Requirements

You will also find information about annual registration requirements ... referred to as the Annual Report.

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The main purpose of the webinar was to explain a bookkeepeer's responsibility with regards to the Corporate Minute Book was one of quality control.

Darlene stressed that bookkeepers are not lawyers (uuhh) and should be aware of what they should and should not do for a client.

As a small business owner, YOU should also be aware of what you ask your bookkeeper to do with regards the Corporate Minute Book ... and what you should defer to your lawyer.

What is a Corporate Minute Book?

Let's start this chat with Darlene's explanation of what a minute book is. Have you refilled your tea cup before beginning?

If my notes are accurate, a corporate minute book is a binder a CCPC must legally maintain.

It should be created when the corporation starts and contain documents about the creation of the company as well as records about the history of running the corporation.

I might add that you can hire your lawyer to keep this binder on their premises and up date/maintain it on a regular basis ... for a fee of course. More on this in a bit.

What Should a Corporate Minute Book Contain?

In the Minute Book binder, you should find the paperwork for ...

1. the annual renewal of your company with your provincial and/or federal government;
2. minutes pertaining to your annual general meeting;
3. resolutions or decisions made by the board of directors, officers, or shareholders; and.... of course
4. your incorporation papers and share certificates.

Darlene indicated these sections / tabs be included in your Minute Book:

• Certificate of Incorporation
• By-laws
• Shareholders Meetings including resolutions
• Notices including completed income tax and GST/HST returns and notice of assessments
• Financial Statements
• Disclosure Register
• Unanimous Shareholder Agreement
• Securities Register
• Shareholders Ledgers and Transfers
• Security Certificates
• Annual Returns - Proof of Filing
• Contracts
• Other Information

I tend to keep any completed income tax and GST/HST returns, notice of assessments and financial statements elsewhere and not in the actual Corporte Minute Book binder.

Do YOU Really Need a Corporate Minute Book Contain?

Canadian law governs corporate statutes. This is where you find the obligation for a corporation to maintain a corporate minute book.

Darlene took the time to explain that in certain instances, statutory penalties may be assessed for "failure to attend to the Minute Book".

On occassion, third parties such as CRA, accountants, bankers or even other federal or provincial authorities may need to examine your minute book. It should be made available to them when requested.

Do YOU Need a Lawyer to Maintain YOUR Minute Book?

You may need to seek legal assistance in recording some of the non-routine resolutions or decisions in your minute book.

Routine documentation may or may not require legal assistance.

An example of a routine document is the resolution to accept the publication of financial statements and the appointment of the auditor. In my very limited experience, the board resolution of a CCPC could also be to waive either or both.

As another example, it is also routine to have shareholder resolutions determining the number of directors, appointing the directors, naming the signatories, adopting the financial statements, other resolutions put forth including stating the annual reference date for the annual report filing.

Keeping in mind that the bookkeeper's role with respect to the Minute Book is one of quality control ... YOU should NOT ask your bookkeeper to:

1. create the initial records for the corporate minute book;
2. "represent the contents of a minute book for the basis of legal opinion"; or
3. update its content without legal representation.

If you want to take on these tasks yourself, you do so at your own risk ... but do not ask this of your bookkeeper.

What About the Annual Report Requirements?

Your annual reminder to renew your corporate name can now be received by email and the Annual Report can be completed online. Darlene suggested it is a good idea to confirm the details with your legal represenative.

Ontario Annual Returns

It was interesting to note that in Ontario, one of the webinar participants explained the annual report is included in the filing of the corporate tax return ... so no annual renewal reminder is sent out.

I want to point out here that Annual Report does not refer to the publication released by public companies for third party use and analysis.

The Annual Report referred to here is a report that you are required to file with your provincial and/or federal government.

In B.C., if you fail to file your Annual Report for two consecutive years, your corporation is struck from the registry.

What Are The Benefits of a Minute Book?

One of the benefits of having an up-to-date Minute Book comes when a business owner decide to sell the business.

According to Darlene, it makes the selling process easier and less expensive.

What Are The Consequences of Not Maintaining a Corporate Minute Book?

Darlene provided a slide with a list of consequences of inaccurate maintenance of the Minute Book which included:

• loss of ability to borrow funds
• loss of ability to sell the corporate shares and qualify for small business capital gains deduction
• being struck from the registry
• being unable to make shareholder dividend payments
• loss of shareholders and directors' protection of personal assets
• restriction of tax stategies

If you are a small business owner reading this chat, I hope it has assisted you in defining what your responsibities are and when you should engage a lawyer .... or what questions you may want to ask of your own lawyer.

* IPBC guest webinar speaker Darlene Lafond is the co-founder of C2Online, an independently owned, Alberta based company.

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Go to Canadian Controlled Private Corporations

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