Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice, contact me (Michael Carabash) or David Mayzel.
It is worth mentioning that submitting and having the government approve of your incorporate package is not sufficient to have your company up and running. In fact, incorporation services may not help you establish by-laws (which are power-giving or authority-giving documents that make corporate actions legal), prepare director and shareholder meetings and minutes (which establish accountability and transparency by letting stakeholders know what was decided upon), and finish explaining each party’s (i.e. shareholders, directors, officers, employees) roles and responsibilities vis-a-vis the corporation. Knowing how to incorporate is a good start, but it’s always wise to consult with a business lawyer with respect to questions about these and other things corporation related. A lawyer can provide these and other documents in the form of a Minute Book.
A Minute Book is just a compendium of documents that help organize the corporation. It doesn’t have to be in any particular form. It’s more like a binder than anything else where you can slip in the following (usually in this order):
Directors, Officers, and Shareholder Registries
The minute book contains various registries. This will tell you WHO the directors, officers, and shareholders are or were and when. These registries should be kept up to date. When a person is selling the shares of their corporation, the buyer will want to examine the minute book to see who the directors and officers are (to ensure that the person signing the share purchase agreement for the vendor has the requisite authority to do so). The purchaser will also want to make sure who the shareholders are, what types of shares they have, etc.
Resolutions of the Board / Shareholders
When the board of directors does something on behalf of the company, a resolution is often passed by the board at a directors meeting. Sometimes, the directors passing a resolution require approval from the shareholders. So the shareholders will need to have their own meeting and pass resolutions confirming the directors’ resolutions. What kinds of things require these types of resolutions, you ask? Well, adopting by-laws, making significant changes to the corporation (e.g. amending the articles), etc. all require that the shareholders approve of the director action.
Consequences of not having an up-to-date Minute Book
If you don’t have an up to date corporate minute book, a lot of professional fees could be wasted on trying to piece together everything. Who are the directors? When did the old ones retire? Was a Form 1 Notice of Change sent to the Ontario government (for an Ontario corporation)? Was the director registry updated? Were director consents obtained? Were director resolutions passed every year? These and other types of questions will need to be asked and the minute book will need to be updated before any further transaction can take place. If you’re contemplating buying or selling your corporation or issuing shares (e.g. to raise money), then you’ll need to have your corporate minute book updated. You may need to have the articles reviewed, the by-laws drafted or updated, the director / shareholder resolutions ready to go, etc. You may also need to contact the Ontario or Federal government and let them know of changes in directors, etc. Not only can transactions be put on hold until the minute book is updated, but delays could occur for things like: the corporation failing to respond to shareholders, directors or officers in a timely fashion about corporate affairs; the corporation failing to file government forms and notices; directors being accountable for things that occurred while they were not in office (because of a failure to update the corporate minute book and send in the proper government notices).
David Mayzel is your legal risk manager. He is a trained courtroom lawyer and has spent many years resolving disputes both in and out of court. He knows how to prepare documents and execute transactions in a way that avoids or mitigates legal risks. He can be reached at 416.528.5280. or firstname.lastname@example.org.
Michael Carabash is your business law adviser. He is an entrepreneur at heart who helps you see the big legal picture. He drafts clear and effective agreements that protect your rights while promoting your interests. He can be reached at 647.680.9530. or email@example.com.
Ljubica Durlovska is your transition lawyer. She helps you with staff and associates, maintaining your corporation, and other business matters. She can be reached at 416.443.9280, extension 206 or firstname.lastname@example.org.
Jonathan Borrelli is your employment lawyer. He helps you with staff and associates matters, including hirings, terminations, switching staff to written contracts and resolving disputes. He can be reached at 416.443.9280, extension 204 or email@example.com.
Benjamin Kong is an experienced business law clerk. He assists David and Michael with corporate matters and purchase / sale transactions. He can be reached at 416.443.9280, extension 207 or firstname.lastname@example.org.
Julie Whitehouse is an experienced business law clerk. She assists David and Michael with corporate matters and purchase / sale transactions. She can be reached at 416.443.9280, extension 203 or email@example.com.
David, Michael, Ljubica, Jonathan, Ben and Julie are a truly dynamic team. Their diverse knowledge, skills, and experiences will help you get the best deal possible while promoting your interests and protecting your rights. You can read dentist testimonials here.