Minute Book Preparation for Ontario and Federal Corporations, Digital and Physical

What a corporate minute book actually is

The statutory record, not a folder of paperwork

It holds the articles, by-laws, minutes, resolutions, registers and share certificates that prove who owns and controls the corporation.

Separate from your accounting records

Your books of account record money. The minute book records decisions and ownership. Both are required, and both are kept.

Digital set and physical book

Nothing in the law requires paper, but lenders and buyers often want to see original signatures, so we prepare both.

What the Canada Business Corporations Act requires

Section 20(1)

A federal corporation keeps its articles, by-laws, any unanimous shareholder agreement, shareholder minutes and resolutions, copies of every notice of directors and notice of change of directors, and a securities register. See federal incorporation for $35.00 plus the $200.00 registry fee.

Section 20(2)

It also keeps adequate accounting records and the minutes and resolutions of the directors and any committee of directors.

Section 50, the securities register

The register shows the name and latest known address of every person who is or has been a security holder, the number of securities held, and the date and particulars of every issue and transfer.

The penalty

A corporation that fails to keep these records without reasonable cause commits an offence under section 20(6), with a fine of up to $5,000.

What the Ontario Business Corporations Act requires

Section 140

An Ontario corporation keeps its articles, by-laws, unanimous shareholder agreements, minutes and resolutions, and registers of directors, officers and shareholders, at its registered office or another place in Ontario chosen by the directors. See Ontario incorporation for $35.00 plus the $300.00 registry fee.

The share transfer register

Every transfer of shares is recorded, so ownership can be traced from issue to today.

The register of ownership interests in land

Section 140.1 adds a register of the corporation’s interests in land in Ontario, with the dates each property was acquired and disposed of, its address, and its land registry details.

The register of individuals with significant control

Who counts

Broadly, an individual who holds, directly or indirectly, 25% or more of the votes or 25% or more of the value of the shares, or who has control in fact.

The federal register under section 21.1

A federal corporation records each individual’s name, date of birth, address, tax residence and how they hold control, records changes within 15 days of learning of them, and reviews the register at least once a year.

Filing with Corporations Canada since 22 January 2024

Federal corporations now file this information with Corporations Canada with each annual return and within 15 days of a change. Corporations can face fines of up to $100,000, and directors and officers who knowingly allow a breach face up to $1,000,000, five years in prison, or both.

The Ontario transparency register since 1 January 2023

Private Ontario corporations keep a similar register under section 140.2. It is not filed publicly, but it must be produced on request to authorities such as the police and tax authorities. Read more on how Ontario and federal significant control rules differ.

The organizational resolutions that make the corporation real

Directors’ first resolutions

Adopt the by-laws, appoint officers, open the bank account and set signing authority.

Issuing the first shares

Accept the subscriptions and record the consideration received, so the shares are validly issued.

The accountant and the audit waiver

Appoint the accountant, and waive the audit where all shareholders agree and the law allows it.

Fixing the year end

The first year end sets every tax filing date that follows, so we fix it by resolution after advice, not by accident. If a holding company belongs above this corporation, now is the time to decide.

Share certificates and the registers

What a certificate states

The corporation’s name, the holder, the class and number of shares, and the certificate number, signed as the by-law requires.

Recording a transfer, redemption or freeze

Each one is a resolution, a register entry and, where shares move, a cancelled and a new certificate.

The three errors we find most

Shares never formally issued, transfers with no resolution behind them, and dividends declared with no directors’ resolution.

Why banks, lenders, buyers and the CRA ask for it

Banks

The share register is the document that proves who owns the corporation, and anti-money-laundering rules require banks to confirm who owns and controls it. Shareholders do not appear on the Ontario public record.

The Canada Revenue Agency

On audit it asks for resolutions and share records, especially where dividends were paid or the small business deduction or lifetime capital gains exemption is claimed.

A buyer’s lawyer

Checks that every share being sold was validly issued and transferred to the seller.

Insurers, landlords and bonding companies

Ask for signing authority and ownership before they commit.

What an incomplete minute book does to a sale

Holdbacks, escrow and indemnities

Gaps rarely kill a deal. They slow it, and the seller pays through a price holdback, an escrow or an indemnity.

The lifetime capital gains exemption

A gap in the share register can put the qualification of the shares in question, which is a tax problem, not a paperwork one.

Fix it before the sale starts

Rebuilding a book before diligence costs a fraction of rebuilding it during diligence. Where a past share issue is legally defective, we describe it in writing and refer it to a lawyer.

Where the minute book must be kept

The registered office or a place the directors choose

In Canada for a federal corporation, in Ontario for an Ontario corporation.

Records outside Canada

Section 20(5.1) of the Canada Business Corporations Act allows federal records to be kept outside Canada only if they can be inspected electronically from Canada during regular office hours.

Six years for accounting records

Section 20(2.1) requires accounting records to be kept for six years after the end of the year they relate to. The articles, minutes and registers are kept for the life of the corporation.

Who may inspect

Shareholders, creditors and their representatives may examine the records during usual business hours and take extracts without charge.