The Need For Well Maintained Minute Books In A Firm

By Krystal Branch

One of the requirements by law for all registered firms is that they maintain up-to-date records of deliberations and resolutions that arise at the firm official meetings. The records are contained in a binder or bound book and should be maintained at the firm registered office or official address for accessibility to all members of that firm. Minute books are basically binders or just files housing all corporate key resolutions and deliberations.

There are several documents that are required to be part of minute books. These include the certificates of incorporation and articles of incorporation, the minutes arising from official meetings such as those held by directors, shareholders and managers, the resolutions from the said meetings, the register of shareholders and that for ledgers, the share certificates, the agreements by shareholders and several other documents are may be specified by the company law.

The legal requirements for minute book vary from one jurisdiction to the other. While some laws do not specifically state that it must be kept by a corporation, there are a number of documents that are specifically outline in most jurisdictions as having to be maintained in an organized manner in a central place. The attempt to fulfill this requirement by itself brings about the minute book.

The book is maintained not just to fulfill legal obligations. It is also necessary for the firm banking and financing activities. The banks will always ask for up-to-date records and documents and if the same are not well maintained, the unnecessary delays arise. In the same manner, it might be costly and time consuming to try gathering and updating records later on after the time in which events took place is long gone.

The other advantages of have well and updated records includes smooth operations and faster implementation of resolutions (ease of reference), the process of going public (issuing of shares) become easier, such matters as takeover, mergers, acquisitions and sale of business can be achieved much faster and facilitate general corporate activities. It is also required when conducting audits whether internal or external. In extreme cases, failure to keep these records is a recipe for cancellation of the certificate of incorporation.

There are a number of approaches that a corporation may resolve to when maintaining minute books. The most common practice however is to do it themselves or entrust the services to an external lawyer for a fee. The process of entrusting the job to employees can be challenging. Other than significant training that employees will have to go through, there is likelihood of conflict of interest.

The option of handing over the duty to a lawyer comes with several other advantages beyond just saving your sanity. In this manner, the documents do not get lost or destroyed, they are completely out of reach from parties with interest such as employees, the documentation will be done in accordance to legal requirements and the updates will be timely and in proper fashion.

The minute books are part and parcel of any organization. When well updated, the organization enjoys from many other advantages other than just fulfilling the legal requirements. This is where standards must be developed and budget set aside for this purpose.

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