Corporate Minute Book (What Is It And Why It’s Essential)

What is a corporate minute book?

What goes in a company minute book?

How do you maintain a corporate minute book?

In this article, we will break down the corporate minute book in detail so you know all there is to know about it.

Are you ready?

Let’s get started!

What is a corporate minute book

A corporate minute book is a binder called “minute book” where a company keeps a record of its official corporate documents and internal operations.

The first documents filed in a corporate minute book are the company’s articles of incorporation, by-laws, certificate of incorporation and the organization resolution of the board and shareholders.

A corporate minute book will generally contain:

  1. Articles of incorporation
  2. By-laws 
  3. Resolution of the board of directors
  4. Resolution of the shareholders
  5. Register of directors
  6. Register of officers
  7. Register of shareholders
  8. Shareholder ledger
  9. Other corporate resolutions

Depending on the size and complexity of the corporation, the minute book can contain many more records such as shareholder agreements, stock subscription agreements, option agreements and so on.

Every major decision should be documented and the record filed in the corporate minute book.

What are minutes?

Minutes or meeting minutes represent the documented account of a meeting or a decision.

For example, the company’s board of directors is accountable to make an important and strategic decision for the company.

The board members will generally meet several times a year to discuss the company’s affairs, governance, evaluate how things are going and what should be done next.

The company secretary is in charge of preparing a written account of what was discussed during these meetings and the decisions made.

That’s what we call the meeting “minutes”.

The minutes represent a detailed note of what was discussed and what decisions were made by whom.

Once the meeting minutes are prepared, they are subsequently submitted to each member of the board present at the meeting to approve and confirm its content.

Ultimately, the approved meeting minutes will be placed in the company minute book to keep an account of the company’s decision and decision-making process.

What goes in a company’s minute book

There are many documents that go into a company’s minute book, let’s focus on some of the important ones to give you a good understanding.

Resolutions of the board of director 

The director resolution or corporate resolution is a document recording the decisions of the members of the board of a company.

The board resolutions are formal legal records that are quite important for a company to maintain in its minute book.

A company is a legal entity and acts, operates and functions through its directors and officers.

Decisions made by the company throughout its existence must be documented to keep an accurate history of why a company decided something, when it was decided and based on what considerations.

Individuals in a company come and go but the company has a duty to keep accurate and complete records of its past decisions.

This is why it is essential for a corporation to keep its corporate minute book up-to-date at all times.

Shareholder resolutions 

A shareholder resolution is a document recording the shareholder proposals and or decisions with respect to certain aspects of the company’s operations and internal activities.

Shareholder resolutions can deal with:

  1. Share issuance
  2. The nomination of the board of directors
  3. Corporate governance
  4. Executive compensation
  5. Restructuring of the shares

The laws pursuant to which a corporation was established defines the rights and obligations of shareholders to decide on important decisions affecting the company.

When the board of directors intends to decide on certain business aspects with possible consequences on the shareholders, generally the shareholders will be required to vote to express their approval or rejection of the decision.

The shareholder resolutions are absolutely crucial to be maintained in the corporate minute book to demonstrate that the board of directors have to take actions and decisions in alignment with what was approved by the shareholders.

Certificate of incorporation

The certificate of incorporation is a document issued by the authorities confirming the incorporation of your legal entity.

You’ll need to keep the record of the certificate of incorporation as formal evidence of the legal existence of the company.

Articles of incorporation

Articles of incorporation are legal documents submitted to the authorities when incorporating the company.

The articles of incorporation will generally outline the following:

  1. Company’s legal name
  2. Different type of class of shares  
  3. Maximum number of shares that can be issued per class of share
  4. The rights and privileges associated with each class of shares
  5. Restrictions on the issue, transfer and ownership of shares

This document is an important document to keep in the corporate records as it provides the legal foundation for issuing shares to stockholders.

Company by-laws 

The company by-laws detail a set of rules adopted by the company’s board of directors after the company has been incorporated so as to run the company efficiently.

The by-laws will outline:

  1. The rights and responsibilities of the directors and officers
  2. The rights and responsibilities of the shareholders
  3. Voting rights
  4. How to hold a meeting of the board of directors
  5. How to hold a meeting of the shareholders

And so on.

It is essential for a corporate minute book to contain the company by-laws to ensure the company’s governing rules are readily accessible for consultation.

Register of directors and officers

The register of directors and officers is essentially a documented history of who served the company.

The register will generally include the directors or officers’:

  1. Name
  2. Address
  3. Role 
  4. Start of mandate 
  5. End of mandate 

The register of directors and officers is important to maintain in the minute book as it allows to trace back a company’s decision to the individuals that were present at the time.

At the end of the day, the register of directors and officers is a log of all the directors and officers appointed in the life of the company.

Stock ledger 

The stock ledger is the record or register of a corporation’s stockholders.

Typically, the stock ledger is kept in the corporation’s minute book and contains relevant information regarding company stock transactions.

Here are some of the information you will find in a company’s stock ledger:

  1. Name of stockholder
  2. Address of stockholder
  3. Number of shares issued to each shareholder
  4. Type of shares issued to each shareholder
  5. Stock certificate number
  6. Date the shares were issued
  7. Date the shares were transferred or cancelled 
  8. Total outstanding number of shares issued to a shareholder
  9. Consideration paid for the shares

In a nutshell, when you consult a shareholder ledger, you want to know who has what type of shares in your company and for how many shares.

Share certificates

Share certificates are actual certificates issued by the company to each individual shareholder certifying that the shareholder is formally a stockholder in the company.

A share certificate will generally specify the following:

  1. Name of the company
  2. Share certificate number
  3. Date certificate was issued
  4. Class of shares
  5. Number of shares
  6. Name of shareholder
  7. Any restrictions associated with the shares (also called a ‘legend’)

A company must keep an excellent record of its shareholders and the shares certificates issued to ensure it deals with the right shareholder according to the rights associated to the shares issued to that shareholder.

Shareholders’ agreement

As the name implies, the shareholder agreement is the agreement entered into by the shareholders of the company mutually agreeing on their rights and obligations vis-à-vis one another and the corporation.

It’s very important to have the shareholder agreement safely filed in the minute book to ensure that decisions involving the shareholders not only comply with the law, the articles of incorporation, the by-laws but also the shareholder agreement.

Company’s information sheet 

A company information sheet is a summary of the frequently-accessed information about the company.

The information sheet is usually placed in front of the minute book for quick and easy access.

As the company evolves, it’s a good practice to keep the information sheet up-to-date so the main corporate facts are accessible.

The information sheet can contain:

  1. Name of the company
  2. State or province of incorporation
  3. Trade names
  4. Business purpose
  5. Principle business address
  6. Name of registered agents
  7. Authorized stocks
  8. Issued stocks
  9. Board members
  10. Company directors
  11. Company officers
  12. Company’s identification number
  13. Fiscal year-end
  14. Annual meeting date 

Why should every corporation have a minute book

Keeping an excellent record of the company’s internal operations is crucial for many reasons.

Let’s see why.

Compliance with the law 

Every corporation must have a corporate minute book to comply with the law.

Depending on the laws applicable to the corporation, the company directors and officers are required to legally keep record of certain documents.

At any point in time, a company may get audited by the government or get involved in certain legal entanglements requiring it to produce its company records.

Without a corporate minute book, a company will be unable to produce its legally mandated documents resulting in further unnecessary complications.

Business stakeholders 

A company should have a proper minute book to present to important business stakeholders or investors.

A company is an ever-evolving entity. 

During its life, it may be required to seek financing from investors, get a line of credit facilities from the bank or even go public.

Investors, bankers and legal advisors will generally ask the company to produce its corporate minute book allowing them to make an informed decision about the company.

Without a corporate minute book, not only the company does not appear professional but the investors and bankers may not provide the financing needed due to lack of proper visibility into the past of the company.

Due diligence 

Another common reason why you need to have a corporate minute book is to allow for an interested party to perform due diligence on your company.

A due diligence is a form of audit or investigation intended to confirm certain facts about a company.

The minute book is generally reviewed to perform legal due diligence on the company.

For example, if a company is looking to merge with another, perform an acquisition or perform other M&A transactions, the buying entity will ask to consult the company’s minute book to better understand the company’s history and how it’s been governed.

How to maintain corporate minute books

A good corporate minute book contains all the important corporate documents divided into relevant sections and properly categorized.

Maintaining a corporate minute book consists of keeping the corporate records up-to-date so at any point in time the corporate records can give an accurate view of the company’s internal corporate activities.

To ensure you are properly maintaining your minute book, you need to make sure you have the following sections and associated documents:

  1. Articles of incorporation
  2. By-laws 
  3. Resolution of the board of directors
  4. Resolution of the shareholders
  5. Register of directors
  6. Register of officers
  7. Register of shareholders
  8. Shareholder ledger
  9. Stock transfer ledger
  10. Subscription agreements 
  11. Corporate registry documents
  12. Share certificates
  13. Shareholder agreement
  14. Option grants 
  15. Credit arrangements
  16. Changes to company articles or by-laws

Minute books should give the reader an immediate and complete picture of history of the corporation.

How do you make a minute book

You can make a minute book by purchasing a minute book binder that comes with the proper document templates needed by the company.

The minute book binder will also come with sample stock certificates a company may issue to different shareholders.

So to make a minute book binder, all you have to do is buy one in stores or online and start completing it.

Corporate minute books and corporate lawyers

Corporate lawyers are generally the legal professionals trained and knowledgeable in managing a company’s minute book.

Corporate lawyers have experience in providing the following services:

  1. Advise the company officers as to important decisions impacting the shareholders
  2. Draft resolutions of the board 
  3. Draft resolution of the shareholder
  4. Help organize annual shareholder meetings and document the votes
  5. Provide legal advice on corporate governance 

A corporate lawyer can also provide the needed support and expertise to ensure a company properly maintains its corporate records and minute book.

Companies who have neglected their minute book may be advised to consult with a corporate lawyer to have them set up their minute book as it is required.

Examples of when a minute book may be needed

During the life of the company, in many scenarios, a company will need to produce its corporate minute book.

Here are some examples:

  1. Getting bank financing
  2. Investment by a venture capitalist
  3. Initial public offering (IPO)
  4. Selling the company 
  5. Working with accountants
  6. Tax audit by the government
  7. Communications with shareholders 
  8. Due diligence for M&A activities

Who is responsible for the minute book

The company’s directors and officers are responsible to make sure the company minute book is kept up-to-date in compliance with the law and properly document important company decisions.

To be more specific, the company minute book is formally managed by the company’s corporate secretary.

In practice, when a company is incorporated by a single individual, that person will be the one responsible for the minute book.

The same person is the president, treasurer and secretary!

As the company grows, the responsibility can be assigned to different people.

In smaller sized corporations, the responsibility may be given to the finance department or CFO.

Larger organizations having the means to hire an in-house counsel, the responsibility will be given to the corporate counsel.

Inherently, the corporate minute book is best managed by a corporate lawyer, 

Corporate minute book takeaways 

A corporate minute book is a binder called “minute book” where a company keeps a record of its official corporate documents and internal operations.

Often, a company’s minute book will be put on a shelf and it collects dust.

In reality, the corporate minute book can be quite important both internally and with external stakeholders.

Companies need to produce their corporate minute books in many instances such as getting financing, dealing with investors and the government.

Keeping a good record of important decisions made by the company in its minute book will demonstrate that a company is organized, it complies with the law and can justify its past decisions.