Keeping Records for Your Company
As a business owner there are a multitude of issues that you deal with on a daily and sometimes even hourly basis. Keeping a Minute Book current may not seem important but is necessary.
In both 2021 and 2022, the province of Alberta implemented changes affecting your corporate records. No, it did not do away with the need for a Minute Book but added some considerations of which you should be aware.
You may know that you can make changes to your directors, your shareholders, your addresses by filing a form at a Registry Office. Many file these forms without realizing that the change is not actually effective without recording that decision by the company. This decision is called a resolution and requires either a motion and a meeting or a written resolution. All these decisions must be retained in your Minute Book, written or digital.
One easy way to record a resolution is the written resolution. Unless your company has a number of shareholders or directors, it may not be necessary to hold official meetings to obtain resolutions. The written resolution may suffice.
Until earlier this year, for business corporations, a written resolution required the signature of all the directors or all the shareholders. Now that has been changed. In early 2022 the Alberta laws changed so that a written resolution of a business corporation only requires a signature of two thirds of the voting shareholders or of the directors.
You may wish to change your bylaws to effect this change. Also you may wish to change your bylaws so that all voting shareholders or all directors, be notified of the proposed written resolution. If you decide not to notify all the parties, you may wish to maintain the requirement for all to sign. You should consult your lawyer to discuss which may be the better choice for your company.
Keeping your Minute Book current may seem an onerous task, but consider if you are audited, or if you choose to sell your business. It needs to be current. If shareholders or directors pass or move away, it can become difficult to update your records. Even if all parties are still available, it can be very time consuming to update a Minute Book that was not keep updated for many years!
Other changes in 2021 require you to appoint someone resident in Alberta to be the Agent for Service for your company. This change occurred as the law was also changed to remove the requirement for at least one quarter of your directors to be Canadian residents. You need a resolution for this.
Yes, new things need to be done to keep your Minute Book up to date. But consider that for your New Year’s resolutions, that you resolve to keep your Minute Book up to date. Easiest if you have your lawyer do this and many are happy to help you for a reasonable cost. Good luck with this!
