A corporate minute book is a collection of basic, but necessary records for incorporated companies. Much like a patient’s health history or a high school student’s permanent record, a minute book contains information about the status of the corporation, its shareholders, directors and corporate board minutes, as well as other company specific information.
Sections 20(1) and (2) of the Canada Business Corporations Act (“CBCA”) state the following:
20 (1) A corporation shall prepare and maintain, at its registered office or at any other place in Canada designated by the directors, records containing
(a) the articles and the by-laws, and all amendments thereto, and a copy of any unanimous shareholder agreement;
(b) minutes of meetings and resolutions of shareholders;
(c) copies of all notices required by section 106 or 113; and
(d) a securities register that complies with section 50.
(2) In addition to the records described in subsection (1), a corporation shall prepare and maintain adequate accounting records and records containing minutes of meetings and resolutions of the directors and any committee thereof.
Thus, according to the CBCA (and other provincial business legislation), corporate records must not only be prepared for every corporation, but must be maintained accordingly. A set of corporate records that is poorly kept or out of date is in violation of the CBCA.
The answer to the initial question then is YES, your corporation does need a corporate minute book.
But the importance of an up-to-date minute book cannot be understated and goes well beyond a legal requirement. Corporate transactions, whether loans, sale or purchase of a business’ assets or shares require a review of a corporation’s minute book. The CRA can always call for a “surprise” audit which may require an examination of a company’s minute book.
Understandably so, minute books are the last thing a client or law firms thinks about, but can often delay loans, financings or transactions, and can dramatically increase legal costs as a result.