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Disclaimer: This article is intended for the purpose of providing information about corporate minute books only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
When you decide to incorporate, you often do so because it offers numerous advantages for your business. Among these are personal liability protection and the potential for tax benefits. What you may not realize, however, is that incorporation also comes with certain record-keeping requirements.
However, these requirements are not daunting or overly time-consuming if you stay on top of them.
Let’s take a minute to look at minute books and demystify what you need to retain for your corporate records. Of course, if you have questions about your specific corporation, we encourage you to book a call with our team.
What is a minute book?
Simply put, a minute book is a collection of records that provides a snapshot of your corporation.
It is a corporate record that documents the proceedings of the board of directors and shareholders. The term “minute book” comes from the fact that minutes are typically recorded in this type of book.
A corporation would use a minute book to comply with the Business Corporations Act for Ontario corporations, or the Canada Business Corporations Act for federally incorporated businesses.
Do all corporations need a minute book?
Yes – whether you have a federal or provincial corporation, they all require that you have a minute book and that you regularly update it.
Can my minute book be digital?
The Ontario Business Corporations Act specifically requires records to be kept in a bound or looseleaf book or stored electronically. However, the Canada Business Corporations Act simply requires that records be reasonably available to be inspected by the shareholders, creditors and the Director appointed under that Act.
What goes in a minute book?
Your minute book should include:
- Articles of Incorporation and any Articles of Amendment
- Corporate bylaws and any amendments
- Any forms filed with the applicable government (for example, an Initial Return (Form 1) which is required to be filed upon incorporation and when any specific changes are made to the corporation.)
- Directors registers
- Shareholders register
- Officers register, if applicable
- Shareholders ledger, which would set out the name, address, class and number of shares held by each shareholder
- Minutes of all shareholders’ and directors’ meetings
- Resolutions passed by written consent in lieu of a meeting
- Copies of any contracts or agreements to which the corporation is a party
- Annual reports, if applicable
- Audited financial statements, if applicable
- Shareholders Agreement, if applicable
- Share certificates
You should update your minute book, at a minimum, on an annual basis. If there have been no changes over the past year, the corporation would simply reaffirm, by means of a resolution, that nothing has changed.
Why Keep Your Minute Book Up To Date?
It is important to keep your minute book up to date for a number of reasons. Let’s outline just three of those reasons.
To ensure the corporation is complying with the law
The Corporation Profile Report will note if you have not complied with keeping your records up to date. In extreme cases, the Ministry can even involuntarily dissolve your corporation, although that is rare.
To have an accurate record of corporate decisions and shareholdings
Your minute book is a key reference for the directors, shareholders and officers of the corporation. It will document major corporate decisions, such as changes to the articles or bylaws, issuing of new shares, or the sale of property.
The shareholders’ register will identify each shareholder and how many shares they own. This can be helpful if there is ever a dispute among shareholders.
To provide it to third parties upon request
There are some cases where a third party will require that you have an up-to-date corporation profile report.
For example, a lender may request one when you are applying for a business loan.
Or, if you ever sell your business, the buyer will want to see an up-to-date minute book as part of their due diligence.
Keeping Your Corporate Minute Books Up-To-Date
Updating your minute book does not have to be complicated or time-consuming. You can do it yourself. You can also hire a lawyer to ensure that it aligns with all legal requirements.
If you have any questions about your corporate records, and how to keep them updated, book a call today! Our team would be happy to help!
Disclaimer: This article is intended for the purposes of providing information about selling a business in Ontario only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Being an entrepreneur is one of the most challenging experiences, but often the most satisfying. It comes with a lot of risks, but also a lot of rewards. One of the biggest decisions you will make as an entrepreneur is when to sell your business.
Do not take the decision to sell your business lightly, as it can be a very emotional process. You have likely put blood, sweat and tears into building your business. Of course, you want to make sure that it goes to someone who will appreciate and care for it as much as you have.
When selling a business in Ontario, there are a few key things to keep in mind. Here are the Dos and Don’ts of selling a business.
DO: Talk to a lawyer when selling a company
The very first thing you should do is talk to an experienced business lawyer (such as the team from Beeksma Law). It doesn’t matter if you are selling the business to your relative, best friend or child. You absolutely need someone taking a look at the legal aspects of your sale.
Time again, our team sees business owners selling their businesses without legal advice. After the sale, there are issues with liability remaining with the seller. The seller did not expect this because there was not a well-written agreement in place.
Selling a business has many moving pieces. Relying on solid legal advice means that we consider all of these potential issues and nothing falls between the cracks.
Don’t: Forget to consider the tax implications of selling a business
The other professional that you will want to speak to is an accountant. There are tax implications to selling your business that you will want to consider so that you do not end up with a hefty tax bill.
DO: Consider whether its a share sale vs. asset sale
In determining the tax implications surrounding the sale, you’ll need to know if it is a share sale or an asset sale. Generally speaking, a share sale will have more tax implications for the seller and an asset sale will have a greater impact on the buyer.
Make sure it is clear what you are selling and what is and what is not included when you are negotiating the sale. For example, some licences are not assignable, so be sure that you are not including something in the sale that you cannot transfer.
DON’T: Be unclear about the plan going forward
One of the most important questions to answer if you are selling your business is, “What’s the end date for your exposure to liability?” Liabilities can be a broad term and can include any accounts payable or liability if someone is harmed by the business’ machinery, for example.
As well, if the business is not being sold outright and you will be making payments over time, how will you structure those payments? Will there be a General Security Agreement? Will there be a PPSA registration against the buyer? How will you ensure that you will receive the full purchase price?
These are all questions that require answers while negotiating the purchase, and a lawyer can help you negotiate these terms with your best interests in mind.
DO: Obtain any necessary third-party consents
While it may be your business, there are instances where you require third-party consent for portions of the sale.
A few examples come to mind. The first is in the instance of a lease. Your lease may have a provision to the effect that you cannot assign the lease to someone else without the landlord’s permission. In other instances, it could be a situation where you structured your corporation in such a way that you require your shareholders’ consent, or you may need to restructure your business because of the sale.
Get advice that you can trust
When selling your business, don’t just seek legal advice. Get legal advice that you can trust. The team at Beeksma Law has a wealth of experience and will work with you to protect your best interests every step of the way.
Our founder, Shayna Beeksma, is a strategic advocate for business owners across Ontario. Not only is she a mentor for other women-led businesses, but she is also an active member of her business community.
We understand that selling a business in Ontario is a big decision, and we’re here to help you through it. Contact us today to learn more about how we can help you sell your business. (As well, stay tuned for our future article on tips for purchasing a business).
Disclaimer: This article is intended for the purposes of providing information on real estate law in Ontario only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
When it comes to teamwork, we like this quote: “No one can whistle a symphony. It takes a whole orchestra to play it.” The point? It takes a team, a talented group of people with a common goal to play a symphony, or to buy or sell a home.
So you may be wondering, who is on my team and what are their roles? This article is designed to outline the people that you want on your team and the role that they will play.
Of course, you want to make sure that each person on your team has the knowledge, experience and expertise to make your transaction a success. Our team at Beeksma Law has handled real estate transactions for years and we would be more than happy to guide you through the process.
An Overview of Buying or Selling a Home
Let’s outline how buying or selling a home will play out.
Buying a home
- Meet with a mortgage broker or lender to determine your budget.
- Work in tandem with your real estate agent to find the home you wish to purchase.
- If you choose to complete a home inspection before the deal is firm, you will do so.
- Work with a law firm to finalize the transaction.
Selling a home
- Meet with a realtor to determine your house’s value and how to market it.
- Work with a home stager or interior designer to get your home ready to show.
- With your realtor, review the offers that you receive and select one.
- Retain a lawyer to handle the legal aspects of your sale.
A Real Estate Agent
The first member of your team is going to be your real estate agent.
Your real estate agent is going to be your guide throughout the entire home buying or selling process. If you are buying, they will help you find homes that fit your criteria, and negotiate the purchase on your behalf.
A common mistake that we see is that many people do not fully understand what they are purchasing before it is too late. When a deal is firm, it is firm. Ontario’s laws operate on the principle of “buyer beware”. So a good realtor will help you understand what you are purchasing, and how to balance having a clear offer with ensuring that you are protecting yourself in the process.
If you are selling your home, a good realtor will know the local market and set a purchase price that will attract buyers while also getting you the most money possible.
A Home Stager
If you are selling, the next member of your team is going to be a home stager.
A home stager’s job is to make your home look its best for showings and open houses. This can involve anything from decluttering, to rearranging furniture, to bringing in rental furniture. The goal is to make your home look as appealing as possible to drive interest and help you get the best offer.
A Mortgage Broker or Lender
If you are not purchasing your property outright, the second member of your team is going to be your mortgage broker or lender.
Your lender may require that your house be appraised and will provide a house appraiser.
Your mortgage broker or lender will provide you with a pre-approval outlining how much you can borrow for your mortgage. They will also work with you to find the best mortgage rate and terms that fit your budget and needs.
A Home Inspector
Home inspections are important whether you are buying or selling a home. A home inspector will check for any issues with the property that could affect the value of the home or cause problems down the road.
This is important – many issues are not visible and the seller may not even know about them. A home inspector will identify these issues so that you can make an informed decision about the property.
The Legal Team
The fourth member of your team is going to be your lawyer and their team.
A real estate lawyer will help to protect your interests, complete any necessary title searches, and help to resolve any issues that may arise during the transaction.
A great real estate lawyer will help you to understand what is involved in your transaction. They will also be able to foresee any potential problems and help you to resolve them before they become issues.
Your Real Estate Team – Working in Harmony
Just like a symphony, each of these professionals bring something different to the experience. However, when they work together in harmony, it is truly beautiful.
You want professionals on your team that have the expertise to perform their role well. Each member should be there to educate, guide and inform you each step of the way.
Think too of your real estate team collectively. They all need strong communication and collaboration skills to work seamlessly with the other members of your team. If there is anything that needs to be changed along the way, these professionals can work together to make these adjustments.
The end result? Peace of mind and confidence at each point of the lifetime of your real estate transaction.
If you are looking for a team of experienced professionals to help you with your real estate transaction, please contact us at Beeksma Law. We would be more than happy to put our team to work for you!