Every incorporated company (business corporation), whether under Quebec or federal law, is required to have a minute book as soon as it is incorporated, and to keep it up to date.
Keeping the minute book up to date is often overlooked by companies because it’s an annual obligation, and entrepreneurs are more concerned with the day-to-day tasks involved in running the business (accounting, human resources, project management, etc.), rather than these annual, corporate obligations. What’s more, it’s common to hear that the obligation to update one’s minute book is only required when changes take place in the company. However, this obligation exists whether or not changes have taken place during the year.
While updating the minute book is a basic task in business law, it becomes more complicated when years of existence have to be regularized a posteriori, and the lawyer turns into an archaeologist.
Today, Lexstart explains what a minute book is, and answers any questions you may have.
What's a minute book in a nutshell?
As a reminder, a joint-stock company is distinguished by the creation of a distinct legal entity that exists independently of the individuals who make it up, work for it or have an interest in it.
It is legally obliged to have and keep up to date a minute book at its head office at all times.
The minute book is a document that tracks the evolution and legal changes that have taken place in your company since its creation, for example: the appointment of a new director, a change of registered office address or the opening of a new establishment. It must be updated whenever these changes take place. It brings together and organizes all important corporate documents in one place, and records the decisions taken by the company’s directors and shareholders.
This document can be made available in whole or in part to the company’s directors, shareholders and creditors, on request. Furthermore, an investor wishing to acquire a stake in your company will ask you to share your updated minute book, so that he or she can understand your company’s history up to the present day. If you are subject to a tax audit, your minute book may be requested.
A joint-stock company must update its minute book as soon as a change occurs in the business. If there are no changes in the company, the minute book must be updated once a year, during the annual updating period with the Registraire des Entreprises du Québec, as provided by law. Any change occurring outside this period must also be declared within 30 days of the date it occurred, by means of a current update declaration.
How is the minute book presented ?
The minute book is composed of several documents :
- Articles of incorporation who are documents given by the government at the time of incorporation that officially give birth to the corporation. They include schedules that are provided by the lawyers who incorporate you.
- By-law(s) describing the internal workings of the corporation.
- Minutes or written resolutions in lieu of the meetings of the board of directors and the shareholders’ meetings who consolidate and formalize all decisions made by these two main corporate bodies.
- Registers of directors, shareholders, officers, securities, transfers who list all the actors, shares issued and/or transferred.
- The shareholder agreement, a document that protects the corporation by providing in advance for solutions approved by all to potential deadlock situations: the sale or transfer of shares, the exit (voluntary or forced) of a shareholder, the ownership of intellectual property created by the shareholders for the corporation…
If you haven’t a minute book, don’t worry, it is never late to comply and have one drafted, which will reflect what has happened in your company since its inception. We can help you!
The minute book of Lexstart
At Lexstart, we offer you the drafting of your digital minute book as if it had been done on the day of incorporation of your company for $450+tx including :
- The digital minute book with constitutive resolutions and by-laws, generated by our technology
- The electronic signature of the documents
- The validation of documents by a lawyer
- The customer service support
This product works for a company with up to 5 shareholders who are all Canadian residents. If this is not the case, please contact us before purchasing, as additional fees may apply.
If your company was incorporated within the last year, or even within the last two years, it is possible to regularize your situation directly with this service. If, on the other hand, your company was incorporated more than two years ago, you will need to go through Barricad Avocats for full compliance. What’s more, if no resolution has been passed since the company was created, we will also need to update your minute book for each year that has passed.
Don’t hesitate to contact us for more information via our online chat or by making a free 15-minute appointment with one of our account managers.
