The Importance of Maintaining a Corporate Minute Book Facelaw platform.
The Importance of Maintaining a Corporate Minute Book Facelaw platform.
Incorporating a business, whether under the Ontario Business Corporations Act (OBCA) or the Canada Business Corporations Act (CBCA), is an important milestone in establishing a legal and operational structure. However, incorporation is only the beginning. Every corporation formed under either statute is legally required to maintain and regularly update certain corporate records. These records are typically compiled and stored in what is referred to as the Minute Book.
A Minute Book is the official record of the corporation’s foundational and ongoing legal documents. It generally includes the Articles of Incorporation, corporate by-laws, organizational resolutions, registers of directors, officers, and shareholders, share certificates, shareholder ledgers, copies of filed annual returns, and minutes of shareholder and director meetings or written resolutions. It may also include agreements between shareholders, financial statements, notices of change, and any corporate decisions made over time. These documents serve as the legal history and governance framework of the corporation and must be kept at the corporation’s registered office or another location designated by the directors.
Maintaining a proper and up-to-date Minute Book is a legal obligation and also a practical necessity. In both Ontario and under federal law, failure to maintain the records required by the respective statute can result in compliance issues, administrative penalties, and even potential liability for directors. More practically, the absence of a complete and current Minute Book often becomes problematic when the corporation seeks to obtain financing, engage in tax planning, enter into commercial transactions, issue or transfer shares, or engage with potential investors or purchasers. Institutions such as banks, accountants, and lawyers routinely request to review a company’s Minute Book when evaluating its legitimacy, structure, or decision-making processes.
Both the OBCA and CBCA impose duties on corporations to keep their records current. Directors in particular have a fiduciary duty to ensure that the corporation complies with statutory requirements, including the maintenance of corporate records. Allowing the Minute Book to fall into disuse may be regarded as a failure of governance and, in serious cases, may undermine the validity of certain corporate acts or expose the corporation to unnecessary risk.
In recent years, changes to corporate transparency rules have introduced additional requirements that corporations must be aware of. Notably, under amendments to the CBCA that came into force on June 13, 2019, all federally incorporated companies are required to maintain a Register of Individuals with Significant Control (commonly referred to as an ISC Register). This register must identify any individual who owns, controls, or directs 25 percent or more of the corporation’s shares, whether directly or indirectly, or who has the ability to exert significant influence over the corporation. The register must contain information such as the individual’s name, address, date of birth, jurisdiction of tax residence, the manner in which control is held, and the date when such control was acquired or ceased. This register must be updated at least annually, and within 15 days of the corporation becoming aware of any change. Non-compliance is an offence under the CBCA and may lead to penalties for both the corporation and its officers and directors.
While Ontario corporations are not currently subject to the same ISC Register requirement under the OBCA, the Ontario government has signalled its intent to adopt similar rules. As such, it is strongly advisable for Ontario corporations to begin tracking ownership information in a manner that would comply with federal standards, especially in cases where ownership is held through other corporations or trustees.
Another important but often overlooked area concerns the ownership of real estate. In Ontario, the OBCA expressly requires that corporations include a real property register in their Minute Book, detailing each parcel of real estate owned, its legal description, registry information, municipal address, acquisition and disposition dates, and supporting documentation such as deeds or transfers. Federally incorporated companies are also expected, based on statutory obligations to retain a register of land interests and guidance from Corporations Canada, to maintain similar records.
In practical terms, the consequences of failing to maintain a Minute Book can be significant. Corporations that are unable to produce a current and complete Minute Book may face delays in closing transactions, difficulties proving ownership or governance authority, tax complications, and in some cases, legal exposure due to missing or improperly recorded decisions. Attempting to reconstruct a Minute Book years after the fact can be both costly and time-consuming, and in many cases, it may not be possible to fully recover or verify the corporation’s legal history.
The obligation to maintain a Minute Book is not limited to larger corporations or public companies. Even closely held private corporations with a single shareholder must comply with these legal requirements. The law does not distinguish based on the size or complexity of the business. Every corporation, whether provincially or federally incorporated, is subject to the same statutory obligations.
If your corporation has undergone changes such as a new shareholder, change in officers or directors, issuance of new shares, change of registered address, or acquisition of real estate, these matters must be properly documented in the Minute Book. We encourage all corporate clients to review their records annually and to contact our office if assistance is required in bringing the Minute Book up to date or in understanding new legal requirements.
