What is a Minute Book and Why Should Every Corporation Have One? – Insight LegalA Minute Book is typically one of the first documents reviewed when a corporation is seeking to partake in various business transactions, such as selling the company or getting a loan, making it one of the most important books of every corporation. When a company seeks to incorporate federally or provincially , it must file its Articles of Incorporation with the government. Corporate by-laws are used by companies to organize their internal management. It is important for any corporation to verify that any business it purports to conduct is consistent with its by-laws, otherwise, the by-laws must be amended before the company can proceed with such business. These key decisions are typically memorialized in resolutions.
Guidance on Books-and-Records Inspection Rights
For most entrepreneurs, corporate record-keeping is the least fun part of the job. However, staying on top of your corporate record-keeping is essential for both legal and strategic reasons. If someone sues your business, he or she might try to pierce your corporate veil and show that your business failed to follow proper corporate formalities according to state law. Beyond the corporate veil, there are other reasons to keep good records: For example, corporate records might be requested by the IRS. Another key reason for keeping accurate corporate records is if you ever want to sell the business.
Just because a minority shareholder has common law and statutory rights to inspect the books and records of a corporation does not mean that the corporation will always comply. When the corporation refuses, the shareholder must turn to the courts for assistance. Lack of information to shareholders is probably the most common violation of shareholder rights and almost always a component of a campaign of shareholder oppression.
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Why you should keep good corporate records
Corporate records are those records a U. Some corporations have a corporate records "book" which includes all the required documents. In other cases, the corporate records are kept online or in a file cabinet. The records should be in one place and available if the Internal Revenue Service audits your corporation. You can also keep your corporate records "in the cloud," but these records may include confidential information and proprietary processes, so be sure your server is secure.