Minute Books
When incorporating your company, a crucial step you need to take is setting up a minute book. During the process of incorporating, the registry will not make you set one up. However, as a business owner you are responsible for creating and upkeeping one. Which may seem intimidating, but with the proper information it is not that daunting of a task.
A minute book is comprised of important company documents and information. These include:
- Articles of incorporation
- Minutes of shareholder/director meetings
- Annual filings/ Financial Statements
- By-laws
Remember, you must update the minute books annually and any time you make changes to your company, for example, changes in shareholder information.
As a new business owner, you may not want to take the time to set up a minute book because it costs money or you simply are not aware of how important it is to the company. Some situations where a minute book will be necessary are:
- If you are trying to sell your company, you will need to produce the minute book to a potential buyer.
- If you ever need to transfer ownership to another person, the minute book will be necessary to help prove ownership.
- Banks will require a minute book when you are applying for loans for your company
- If you are trying to purchase property you will have to produce a minute book to complete the transaction
- Potential investors may request to see your minute book when deciding if they should invest in your company.
- If you have a partner, a minute book will keep record of how much is owned by each party and any major decisions made in the companies name. This can protect you if there is ever a dispute between partners or one partner wants to dissolve the partnership.
- A professional will require an accurate minute book when preparing your tax returns. Without this, they may produce inaccurate returns.
- Government agencies will request a minute book for information. If you do not have a minute book, they can inflict penalties on your company.
If you do not have a minute book and one of the above situations arises you will need to quickly prepare one. This is not only time consuming to you, but can be quite expensive. In addition, you may miss a document or put inaccurate information into the minute book. This could end up costing your company more than the initial price of setting one up and maintaining it.
If you have any questions or need help with your minute book, feel free to contact On-Core today!