Legally, there are several requirements that any corporation must meet before and after being incorporated in all jurisdictions world over. Among these, proper documentation and maintenance of the same documents tops the list. For registered firms in particular, failure to properly maintain important documents risks being deregistered. An up to date documents and deliberations are normally filled or contained in a binder in the firm official address such as registered office for access by employees and government agencies. These are what are known as minute books, collection of all important records and key resolutions in official meetings.
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.
Other than for legal obligation, proper documentation of company records comes with several other advantages. It makes the management and general operation smoother as retrieval and reference can be achieved much faster. This also saves on unnecessary expenses, reduces wastage of man hour and contributes to overall profitability. This may not be the case if locating such documents was to be done at a future date long after it is overdue.
The other significance of keeping documents in order is to avoid unnecessary penalties, delay in change or ownership structure such as mergers, takeover, selling the corporation, going public (initial public offer). In case the corporation is in default of notice filings that are mandatory, its certificate of incorporation risks being cancelled. The document also comes in handy when performing internal audit, external audit and government audit where the documents are required.
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.
In that case, a lawyer may take over the process. This comes with several advantages to the firm. They are better equipped with the necessary skills required to properly maintain the legally required documents, the access is denied from unauthorized persons, there are no likelihood of lost documents and delays among several other advantages.
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.
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.
Other than for legal obligation, proper documentation of company records comes with several other advantages. It makes the management and general operation smoother as retrieval and reference can be achieved much faster. This also saves on unnecessary expenses, reduces wastage of man hour and contributes to overall profitability. This may not be the case if locating such documents was to be done at a future date long after it is overdue.
The other significance of keeping documents in order is to avoid unnecessary penalties, delay in change or ownership structure such as mergers, takeover, selling the corporation, going public (initial public offer). In case the corporation is in default of notice filings that are mandatory, its certificate of incorporation risks being cancelled. The document also comes in handy when performing internal audit, external audit and government audit where the documents are required.
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.
In that case, a lawyer may take over the process. This comes with several advantages to the firm. They are better equipped with the necessary skills required to properly maintain the legally required documents, the access is denied from unauthorized persons, there are no likelihood of lost documents and delays among several other advantages.
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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