Why Keeping Your Corporate Minute Book Current is Important
Do I Really Need to Keep Annual Minutes For My Corporation?
In short – the answer is yes – here’s why:
- The Business Corporations Act specifically mandates that these records be kept
- In the event of a government audit, a copy of the minute book is often requested to confirm current and past information.
- If a sale of the corporation is being considered, the buyer will want to review the minute book as part of due diligence.
- If a dispute among directors or shareholders arises, there may be disagreement regarding prior matters.
To incorporate, or not to incorporate: that is the question!
Many entrepreneurs face this issue when deciding how to lay down the legal foundation of their business. Unfortunately, there is no simple answer to the question as it depends on each individual’s unique circumstances. In order to help make that decision, the following factors should be considered:
• Limited liability: The main advantage of incorporating is the limited liability of an incorporated company. Unlike a sole proprietorship where an individual is fully liable for all debts of the business, in a corporation, liability is generally limited to the assets of the company.
• Income control and tax planning opportunities: A corporation can control the timing of income being distributed to individual owners which can represent a real advantage in terms of tax planning opportunities. For example, income can be deferred within the corporation until an individual’s personal income is lower and thus, pay lower taxes.