A corporation is a separate legal entity from its shareholders.  A corporation can have one shareholder, or it can have many shareholders. Berkshire Hathaway Inc., for example, is an investment fund with over three million shareholders.  Whether big or small, they are expected to maintain a corporate “Minute Book.”  

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“Minutes” are a summarized version of certain events.   A Minute Book is a formal record of all the “minutes” of directors and shareholders meetings and contains important corporate details such as a copy of their foundational documents, articles of incorporation and bylaws, and a registry of shareholdings.    The term “minutes” has nothing to do with timekeeping.  Rather, it is derived from “minuta scriptura” which means small writings (minutes on a clock are actually “my-noot” increments on a clock).

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Corporations are heavily regulated.  Under the Corporations Act of Manitoba, and of most other jurisdictions, it is a legal requirement to maintain a form of Minute Book. Under those legislations, a corporation is required to have a registered office and is required to maintain at that registered office the following:

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a. Articles and Bylaws along with any amendments and any shareholder agreements; 

b. Minutes of meetings and resolutions of the shareholders; 

c. A register of Directors and the dates that they became or ceased to be directors; and 

d. A list of all shareholdings/securities. 

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Many corporations and their shareholders are surprised that it is actually a Provincial Offence to not to have such records and a corporation can be fined if it fails to do so. The reason it is a legal requirement to maintain it is that shareholders and creditors of a corporation are legally entitled to examine corporate records during business hours and they may take copies of those records free of charge. The underlying concept is that any shareholder or interested party in a corporation should have access to its records so they can see who is managing their investment.  A lender may, for example, want to see who is controlling the assets that they lent money to.​

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A further reason to maintain these records is that Canada Revenue Agency may want access to it under their audit rights.  They may want to see that certain alleged transactions were actually completed, or they may want to pass tax onto an individual instead of the corporation (called “imputing income” ).  The Minute Book would reveal how those important transactions were structured and the individuals behind it.  As such, it is important to maintain your Minute Book in case of an audit.  

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Another reason to have a Minute Book is that if a corporation or shareholder is going to sell, then a buyer will want to see that all the important transactions have been appropriately recorded in the Minute Book, because the buyer inherits those obligations.

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Accordingly, as mundane as it may seem, there are legal and practical reasons to maintain your Minute Book. Because of the importance and occasional complexity of doing so, most clients have their lawyers maintain their Minute Book at their law office and their lawyers will ensure that it is properly updated and the proper annual filings are completed.

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As with any other legal matter, it is important to consult your legal professional regarding your rights and obligations. Meighen Haddad LLP welcomes your call should you wish further information on this or any other matters.​​​​​