When it comes to incorporating most entrepreneurs employ the ‘do-it-yourself’ route. There are many websites or Incorporation packages purchased at registries offices to facilitate this. Doing it this way is enticing to lower costs. This is reasonable as starting up a company is expensive however down the road this short cut can result in more costs.
A minute book is used by corporations to organize and document key corporate records. It holds the corporation’s by-laws, organizational resolutions, share descriptions, registers and share certificates.
Here are the 4 practical reasons you need a corporate minute book:
1. Avoid Penalties
Although uncommon, you can face penalties from the federal or provincial governments if not maintained properly.
2. Secure Funding
If you want to raise capital or secure a loan, third parties such as bankers, investors or accountants may want to review your minute book to evaluate your company.
3. Audit simplicity
If federal or provincial taxation authorities choose to audit you, they may want access to your corporate minute book to evaluate your business’ financials. An up-to-date corporate minute book can help streamline the entire process.
4. Potential Sale
If you’re looking to sell your corporation at some point, you will want a professionally compiled and up-to-date minute book. To perform due diligence and evaluate your corporation, a buyer will want access your minute book.