The Importance of Maintaining Accurate Records for Corporate Law Compliance

As a corporation, maintaining accurate records is crucial for ensuring compliance with corporate law requirements. In this article, we'll explore the importance of maintaining accurate records for corporate law compliance and provide tips on how to do it effectively, with a focus on digital minute books.

Why Accurate Records Matter

Maintaining accurate records is essential for corporations to ensure compliance with various corporate law requirements, such as:

• Meeting minutes: Accurate records of board meetings and shareholder meetings are necessary to demonstrate compliance with corporate law requirements, such as the requirement to hold annual meetings and maintain a record of meeting minutes.
• Director and shareholder resolutions: Accurate records of director and shareholder resolutions are necessary to demonstrate compliance with corporate law requirements, such as the requirement to obtain shareholder approval for certain transactions.
• Corporate governance documents: Accurate records of corporate governance documents, such as articles of incorporation and bylaws, are necessary to demonstrate compliance with corporate law requirements.

Examples of Corporate Law Compliance Records

Some examples of corporate law compliance records that corporations should maintain include:

• Board meeting minutes: Minutes of board meetings that document discussions, decisions, and actions taken by the board of directors.
• Shareholder meeting minutes: Minutes of shareholder meetings that document discussions, decisions, and actions taken by shareholders.
• Director resolutions: Resolutions passed by the board of directors that document decisions and actions taken by the board.
• Shareholder resolutions: Resolutions passed by shareholders that document decisions and actions taken by shareholders.

Tips for Maintaining Accurate Records with a Digital Minute Book

To maintain accurate records with a digital minute book, corporations should:

• Choose a reliable digital minute book platform: Select a platform that is secure, reliable, and easy to use, and that meets the corporation's needs.
• Configure the platform to meet corporate law requirements: Configure the platform to ensure that it meets corporate law requirements, such as the requirement to maintain accurate and complete records of meetings and resolutions.
• Train directors and officers on using the platform: Train directors and officers on how to use the platform to ensure that they are comfortable with the technology and can use it effectively.
• Regularly review and update records: Regularly review and update records to ensure that they are accurate and up-to-date.

Benefits of Digital Minute Books

Digital minute books offer several benefits, including:

• Increased efficiency: Digital minute books can streamline the process of maintaining records, reducing the time and effort required to prepare and store records.
• Improved accuracy: Digital minute books can help to reduce errors and improve the accuracy of records, by providing a centralized and organized system for maintaining records.
• Enhanced security: Digital minute books can provide enhanced security features, such as encryption and access controls, to protect records from unauthorized access or tampering.

Conclusion

In conclusion, maintaining accurate records is crucial for corporations to ensure compliance with corporate law requirements. By using a digital minute book and following the tips outlined above, corporations can ensure that they are maintaining accurate records and meeting their corporate law obligations.

Ready to streamline your corporate record-keeping and ensure compliance with corporate law requirements? Contact us today to learn more about our digital minute book solutions and how we can help you maintain accurate records.

 

Corporate Annual Returns – What You Need to Know

Just one of the many responsibilities that an incorporated company faces is making sure the annual return is done properly and submitted on time to keep your corporation in good standing. The annual return is separate from your tax return – it is provided by corporations to keep the government informed on any internal changes made during the previous fiscal year. 

The costs and timeline for filing your annual return is dependent upon the jurisdiction of incorporation.

The purpose of the return is to update your corporate records, which can include:

• name of corporation
• registered office address
• corporation number
• financial year end
• description of type of business
• registered office
• corporate directors
• date of last annual meeting

If a corporation does not file its annual return within the time frame allowed (or at all), penalty fees can be applied. If said corporation repeatedly fails to file its return (generally for two consecutive years) the government department or agency in the corporation’s jurisdiction can remove the corporation from government records.

For not-for-profit corporate returns, every registered charity must file an annual information return within 6 months after the end of the charity’s fiscal year.

Similar to the corporate annual return, the annual information return for charities provides the government up to date information on the charity’s records.  However, the annual information return also requires more in-depth reporting on financial information including financial position, compensation, non-cash gifts, assets, liabilities, revenues and expenditures.  

Please contact CorporationCentre.ca to file your corporate annual return. We're happy to help!

How to Choose a Corporate Name

There are many elements that go into choosing a business name.  Most business owners want a name that not only describes their business but has good marketing potential and stands out from the crowd.  But, more importantly, names have to meet the legal requirements set by the jurisdiction of incorporation.  This is where things can get difficult!   You can choose a name that sounds really cool and fits perfectly with your business, but the government may think otherwise.

To avoid the disappointment of a name rejection, here are some tips on choosing a name that fits with your business AND the legal requirements.

Create a distinctive element.

This is what sets your business apart from others.  Whether it be a coined or original word, geographic location or family name it is important to be original and creative when coming up with this element to avoid infringing upon another company name.

Add a descriptive element.

This part tells the customer the type of business the company does.  For instance, if you’re a tech company you may want to use something like ‘Software’ or ‘Telecommunications’.

Choose your legal ending.

This is the easy part.  Legal endings come in various forms but all incorporated companies must have one attached to their name.  The legal names used in Canada are Inc., Ltd., Corp., Incorporated, Limited, Corporation.

      Make your name memorable.

      An easy to spell name with positive connotations goes a long way in marketing your business.  Keep in mind how this name might look as a logo, on a website, in signage and used in other marketing collateral.  

The criteria used if there is confusion with another company is the distinctive character of each name, the visual or phonetic similarity, the ideas evoked, the manner in which the names are used, notoriety of the name, potential competition between the companies, the nature of services provided, and the territory served by the company.

To avoid paying for numerous name reports, doing a pre-search of corporate names can help you get an idea of what names are already in use.  To avoid disappointment, come up with at least 3 variations of your name, all of which you are happy with, so that if your first choice is rejected you have other options that can meet the requirements.

5 Reasons to Keep Your Minute Book up to Date

One of the many requirements of a corporation is to maintain a minute book. This is the official record of all of your company’s business dealings. Often it falls to the responsibility of the “recording secretary” of the corporation to keep the minute book up to date. Why is this important? Here are the top five reasons to keep your corporate minute book up to date.

1)      Detailed History

If for no other reason, the minute book becomes the written history of your corporation from its inception up to the last board meeting. This “open book” allows the many potential owners and their lawyers the opportunity to review all the actions taken by the corporation. It also establishes important financial milestones which will come in handy when it is time to report taxes and expenses.

2)      Supports the Corporate Structure

A current minute book record will clearly show how decisions were made and voted on. This might come into play when a minority shareholder or director questions the actions of the board. In extreme cases, a government agency might want to review how certain decisions were made. The minute report clearly lays out the corporate structure at any given time. By doing so, the authority to make those decisions shouldn’t come into question.

3)      Legal Backing

The bigger the corporation the bigger the chance that a legal opinion will have to be written to support a decision made by the board. With this record, your company’s attorneys will be able to build their opinions on a solid foundation of facts. This type of opinion could be written when a business is looking for investors and needs to establish the various banking relationships of the parent company. A corporation’s minute book can also serve as evidence in any dispute.

4)      Stock Records

The minute book should have a section that keeps track of all the company’s stock records. It’s vital that this is always kept up to date so as to establish the current ownership. In fact, a corporation’s ownership principals are only officially recorded in the minute book. This record should also keep track of stock transfers and who the original holders of the stock certificates are.

5)      Dividend Records

Just as it is important to trace ownership, it is equally important to keep track of dividend and compensation payments. A corporation cannot provide a clear financial portrait without access to these kinds of numbers. In fact, all company expenditures should be included in the minute record.