As a business owner, you may have heard of the term “minute book” but may not fully understand what it entails. A minute book is a record of all corporate meetings and resolutions, which is legally required by the Ontario Business Corporations Act. These documents serve as evidence that a corporation has been conducting business in compliance with the law.
To ensure that your minute book is up-to-date and accurate, it is important to have it audited regularly by a corporate lawyer. In this blog post, we will discuss why minute book audits are necessary and what to expect during the process.
Why Are Minute Book Audits Necessary?
There are several reasons why minute book audits are necessary for your business. Here are a few key reasons:
- Compliance with the Law: The Ontario Business Corporations Act requires all corporations to maintain accurate records of corporate meetings and resolutions. Failure to comply with this requirement can result in penalties or legal liabilities. A minute book audit helps to ensure that your business is complying with the law.
- Due Diligence: If your company is involved in a merger, acquisition, or other business transaction, the other party will likely want to review your minute book. A well-maintained minute book can help to instill confidence in potential investors or buyers.
- Protection Against Litigation: In the event of a legal dispute, a well-maintained minute book can serve as evidence that your company has been operating in compliance with the law. This can help to protect your company against potential litigation.
What to Expect During a Minute Book Audit
During a minute book audit, a corporate lawyer will review your minute book to ensure that it is up-to-date and accurate. Here are some of the tasks that may be performed during a minute book audit:
- Review of Corporate Documents: The lawyer will review all corporate documents, including articles of incorporation, by-laws, and shareholder agreements. They will ensure that these documents are up-to-date and accurately reflect the current state of your business.
- Review of Meeting Minutes: The lawyer will review all minutes of past corporate meetings to ensure that they are accurate and complete. They will also ensure that any resolutions passed at these meetings were properly documented.
- Update of Minute Book: If any discrepancies or inaccuracies are found, the lawyer will update the minute book to ensure that it is accurate and up-to-date.
- Recommendations for Improvement: The lawyer may provide recommendations for improving the minute book or corporate governance practices to ensure that your business is in compliance with the law.
In Conclusion
A minute book audit is an essential part of maintaining accurate corporate records and complying with the law. By working with a corporate lawyer, you can ensure that your minute book is up-to-date and accurate, which can help to protect your business from legal liabilities and instill confidence in potential investors or buyers. Contact Falcon law pc at 1-877-892-7778 or info@falconlawyers.ca for more information on how we can assist with your minute book audit and corporate governance needs.
