Keeping a corporate minute book up to date in Canada is important because it is a legal requirement and a key piece of evidence that your corporation is valid, well-governed, and compliant with tax and corporate law. It also directly affects your ability to borrow, sell the business, survive audits, and resolve shareholder issues.
Legal compliance
- Corporations under the CBCA and provincial Acts must keep current records of articles, by-laws, shareholder and director minutes/resolutions, registers, and certain notices at the registered office or designated location in Canada.
- Failure to maintain proper records can be an offence under legislation such as Ontario’s Business Corporations Act, exposing the corporation and its directors to fines and, in serious cases, even risk of dissolution or loss of corporate status.
Tax and audit protection
- CRA auditors routinely request access to the Minute Book to verify that dividends, bonuses, reorganizations, and other transactions reported in tax filings were properly authorized.
- If the Minute Book does not reflect those transactions, CRA can argue they “did not happen” in law, leading to reassessments, higher tax, penalties, and interest.
Banking, lenders, and investors
- Banks and other lenders often review the Minute Book to confirm who the directors and officers are, who legally owns the shares, and that borrowing and security documents were properly authorized.
- Investors and potential partners typically treat an organized, current Minute Book as a basic test of governance, professionalism, and reliability before committing capital.
Business sales and succession
- In a share sale, buyers and their lawyers almost always insist on reviewing the Minute Book as part of due diligence to confirm title to shares, past approvals, and the absence of “skeletons.”
- An outdated or incomplete Minute Book can delay closing, reduce the purchase price, or require costly, stressful, and sometimes impossible last-minute clean-up work if past shareholders or directors are unavailable to sign.
Dispute prevention and governance
- Accurate minutes and resolutions create a clear record of who decided what, when, and on what authority, which reduces the scope for shareholder and director disputes.
- In conflicts over ownership, dividends, or management decisions, a well-kept Minute Book is strong evidence in the corporation’s favour; a poor one can undermine its position and increase litigation risk and cost
Need help bringing your corporate minute book up to date? Contact the team at Welsh Law to discuss your corporate governance needs and ensure your records meet all legal requirements.