What is a Corporate Minute Book?
A Corporate Minute Book, also known as a Minute Book, is a collection of all the important records of a company such as articles of incorporation, shareholder ledger and many others. It is a repository for tracking important dates and changes in business structure or ownership, along with notes pertaining to important events in the company.
Even though a few companies still use a physical binder for their minute books, many companies have opted to store their minute books online so they can share them easily.
Corporate Minute Books are important for businesses because they ensure that the formal decisions of the directors are recorded in an accessible place. It is also important for businesses to have a corporate minute book because it helps to keep their business transparent to other stakeholders.
Why use Minute Books?
The following are some reasons why you should use Corporate minute books:
- For keeping track of all the important documents in one centralized location
- In order to comply with legal obligations
- For conducting an audit by accountants
- For raising capital from investors or seeking loans from banks
- For selling the company or shares to other buyers
Who is responsible for maintaining a Minute Book?
Since the minute book contains important records of the company, it has to be kept up-to-date in compliance with the laws and regulations. The minute book is maintained by the company's corporate secretary for recording all important information.
Most of the time, the individual incorporating the company will be the one managing the minute book. As the firm grows, various people can be assigned responsibility, from the CFO to the legal counsel, based on the corporation.
What records go into Corporate Minute Books?
The following records are kept in a corporate minute book. The details about each of the records will be explained in more detail in the sections following.
- Article of Incorporation or the Certificate of Incorporation
- Resolution of the board of directors
- Shareholder resolutions
- Company by-laws
- Register of directors and officers
- Share certificates
- Shareholders’ agreement
- Shareholders’ Ledger
What does a Corporate Minute Book contain?
While the records that go into a minutes book may vary from company to company, there are some documents that are essential to every company's minute book. In this section, we take a look at these documents.
Articles of Incorporation
Whenever a business plan to do business, it must be legally incorporated. Articles of Incorporation serve as proof that the company is registered. A company formation document, such as an article of incorporation, validates the legality of the business, as well as outlines the details of how the company was formed, such as its name, its shareholders, its address, and the company's purpose.
Resolution of the board of directors
Companies are legal entities whose directors operate, act, and function on behalf of the company.
The directors and shareholders of a company are responsible for making key decisions. As companies often make multiple decisions during their lifetime, it is imperative to have this information documented in order to keep an accurate record of why a decision was made, when it was made, and based on what factors.
The director resolution or corporate resolution is a document containing the decisions of the company's board of directors and is included in the minute book.
A shareholder resolution is a record of shareholder proposals, such as the issue of shares, the restructuring of shares, the nomination of directors, etc. Minute books should include shareholder resolutions to ensure that the board of directors is following shareholders' directives.
Upon incorporation, a company is required to follow a set of obligations and rules relating to its shareholders, officers, and directors. These are referred to as company by-laws.
The by-laws usually provide details about board meetings, voting rights, shareholder rights, responsibilities, etc. By including company bylaws in the minute book, the rules governing the company are readily accessible when needed.
Register of directors and officers
The register of directors and officers is a detailed record of who served as officers and directors of the company.
In general, the register will include the names and addresses of directors and officers, as well as information about the start and end of their mandates. This record is intended to keep track of all the directors and officers appointed throughout the lifetime of the corporation.
Share certificates are certificates issued by a company to each shareholder certifying that the shareholders are the registered owners of shares in the company.
Share certificates typically include information about the certificate number, the class of shares, the number of shares, and the shareholder's name.
A shareholders' agreement establishes the relationship between the shareholders of a company. The shareholder agreement sets forth the rights and obligations of the shareholders toward one another and towards the corporation. This document provides a framework for how shareholders interact with one another.
Shareholders' ledgers identify each shareholder of a corporation and state how many shares that shareholder owns. Additionally, the log contains information about the purchase, sale, and transfer of such shares.
In larger organizations, the Corporate Minute Books can also contain many more records that record stock subscription agreements, option agreements, and other corporate records.