Corporate Minute Book: Everything You Need to Know
A corporate minute book is where important records concerning a corporation are stored. This should be done with the assistance of a corporate lawyer who can assist in getting the corporation formed and organized as well as creating the minute book. 3 min read
A corporate minute book is where important records concerning a corporation are stored. This should be done with the assistance of a corporate lawyer who can assist in getting the corporation formed and organized as well as creating the minute book.
What Records Go in the Minute Book?
Corporations are not required by law to prepare minute books but they do need to keep certain records, and a minute book is the suggested method for doing so. These are some of the records that need to be stored:
- Corporation bylaws
- Share certificates
- Shareholder resolutions
- Documentation regarding the board of directors' appointment
- Annual reports and other filings
- A register containing the names and addresses of shareholders and information about how many shares each of them hold
This reference is a big help to a corporation's proper administration. If the corporation should ever be audited, it provides the records needed all in one place. It is also useful if the corporation should seek financing or if it will ever be sold.
Templates for maintaining a corporate minute book are available, but there's no substitute for consulting with a corporate lawyer since every individual business has different needs.
Why Keep a Minute Book?
Every corporation needs to keep organized, detailed paper records. This begins from the date that the corporation is formed when it must file Articles of Incorporation or Certificate of Incorporation. After that point, every action must be approved by an appointed board of directors. The election of officers, issues of stock, and many other transactions need to be documented to prove that the board properly authorized these actions and that they were conducted in accordance with the company's bylaws.
Corporations often need to produce proof of board approval. In addition to actions such as applying for credit or obtaining financing, documentation might be needed to deal with a legal issue or satisfy inquiries from potential investors. If these records are not kept in a secure, organized manner, situations like these will be much more complicated. They can also result in larger legal fees.
What are Minutes?
A secretary is designated at each board meeting. This person is responsible for making sure written notes are kept; these are called “minutes.” These notes cover all discussions that the board conducts as well as any resolutions and votes. These minutes are reviewed and approved at the next board meeting. The secretary will sign the minutes, and they will go into the Minute Book as an official record.
How Minute Books are Maintained
Minute books may be divided into sections which contain relevant documents along with an index. These include:
- Certificate of Incorporation, along with all amendments that have been filed within the state where the corporation was formed.
- Corporate bylaws, along with amendments.
- Board of Directors, including documentation regarding their appointment, meeting minutes, and all documents signed by board members at meetings.
- Stockholders, including all issues that were voted on by stockholders and the result of such vote.
In addition to those sections, you could also include information on all of the officers and directors, the company's EIN and tax ID numbers, and any other relevant information. You can keep this information electronically or on paper, or both. You may also wish to give a copy to your attorney for safekeeping.
The owner of the company, shareholders, and secretary all have a part to play in maintaining the corporate records. It need not be complicated or difficult. Keeping the minute book up to date is the simplest way to stay organized. Keeping it current by making sure it is updated every time there is a new document that belongs there, makes the task manageable.
Keep in mind that it is an essential element of corporate administration. You don't want to be caught with incomplete records if it should need to be inspected.
When Will the Minute Book be Needed?
There are several situations where your minute book will be required, such as:
- Selling your business
- Borrowing money
- Hiring an accountant to prepare tax returns
- Dealing with an IRS audit
- Communicating with shareholders regarding decisions
Every major decision or resolution should be included in the minute book. If you're not sure whether or not it should be included, include it anyway. It is better to have more documentation in your minute book than you need rather than missing something important.
If you need more information or help with a corporate minute book, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.