Business 101: Maintaining Your Corporate Records

Asset 21All corporations in Ontario are required to create, maintain, and preserve a range of corporate documents known as “Corporate Records”. These records are typically stored in the corporation’s minute book, which acts as the official record of the corporation’s activities and history. Typically, the Corporate Records are kept at the corporation’s registered office or at another designated location within Canada, as determined by the corporation’s directors (e.g., your lawyer’s office).

 

What Are Corporate Records

In general, the Corporate Records include the following documents:

  1. Constating documents: This includes the Articles of Incorporation or Articles of Amalgamation, along with any Articles of Amendment, or other similar documents;
  2. By-Laws: The by-laws (or governing documents), along with any amendments, are to be retained in the Corporate Records;
  3. Shareholder Agreements: The Corporate Records should also include copies of any shareholder agreements;
  4. Minutes and Resolutions : The minutes and resolutions of the shareholders, directors, and any applicable committees, must be recorded and kept in the Corporate Records;
  5. Registers and Ledgers: This includes various registers and ledgers such as:
    • Registers of current and past directors, officers, shareholders, and holders of debt obligations of the corporation (including the name, residence address, and email address (if available) of each such person),
    • Share Transfer Register,
    • Register of Ownership Interest in Real Property, identifying any real property owned (or previously owned) by the corporation, together with the date of acquisition and if applicable, the date of disposition, and
    • Register of Individuals with Significant Control, identifying all individuals with significant control (“ISC”), together with each individual’s legal name, last known address, jurisdiction of residence (for tax purposes), date they became (or ceased to be) an ISC, and a description of how they are an ISC. The corporation must also document each step taken to record, maintain, and update this register. For more information about the ISC register, see our related article on this topic.
  6. Copies of any registrations and filings: This includes copies of various registrations and filings such as Form 1-Notice of Change/Initial Return, Annual Return, Extra Provincial Registrations, and Business Name Registrations.

All of these documents and records are essential for the proper functioning and compliance of the corporation. It is important to keep them organized and up-to-date in the Corporate Records.

Please be aware that in addition to the Corporate Records, corporations are also obligated to maintain sufficient accounting records and adhere to the record-keeping obligations outlined in the Income Tax Act (Canada) (the “Tax Records”). Among other things, the Tax Records include information relating to the income and expenses of the corporation. Under tax legislation, the corporation is required to keep its Tax Records in a legible and retrievable format that is ready for inspection at any time by a CRA auditor. For more information regarding the Tax Records that your corporation needs to prepare and maintain, or any annual or transactional specific tax reporting requirements, we strongly recommend consulting a chartered professional accountant.

Annual Requirements

Corporations not only have the obligation to record and maintain their Corporate Records, but they are also required to regularly update them. While certain updates are triggered by specific transactions or changes, others must be done on a continuous basis, regardless of any changes within the corporation. For instance, the following tasks must be completed annually:

  1. Annual Minutes or Resolutions: The directors and shareholders of every corporation are required to meet every year regarding and record such meeting in their minutes. In lieu of minutes, the directors and shareholders can pass annual resolutions. In the annual minutes or resolutions, the directors and/or shareholders will approve the corporation’s financial statements, re-elect directors and officers, provide consent to the exemption from audit (if applicable), and address certain other routine business and corporate matters;
  2. Annual Return: Every year, all corporations are required to file updated corporate information with the Ministry through an annual return, even if no changes have occurred since the previous annual return submission. This return is due within 6 months of the corporation’s fiscal year end. Note that while this return was previously filed as part of the yearly corporate tax submissions, it is now separate from tax returns filed with CRA the corporation or by your accountant, and is submitted to the Ministry of Consumer and Government Services; and
  3. Review and Updating the Individuals with Significant Control Register: At least once per year, the corporation must take active steps to ensure that all individuals with significant control (ISCs) have been identified in the register, and verify that the information pertaining to each ISC is accurate, complete, and up to date.

 

Recording Updates and Other Changes

In addition to the annual maintenance noted above, whenever transactions or changes occur within the corporation, the Corporate Records will need to be updated and resolutions and/or other government filings completed. For example, additional documents or filings may be required if any of the following occur:

  1. Changes to shareholdings (e.g., shares issued, transfers, redemptions, etc.);
  2. Changes to the address or contact information for the corporation, directors, officers, shareholders, or ISCs;
  3. Changes to the North American Industry Classification System (NAICS) activity code and description which best describes the activities of the corporation; and
  4. Declarations of any funds being drawn from the corporation (e.g., dividends or management bonuses declared).

 

Please note: The information contained above summarizes the requirements for corporations incorporated under the Business Corporations Act (Ontario) only. If your corporation was incorporated under the Canada Business Corporations Act, or the laws of another province or jurisdiction, you should consult with a lawyer directly regarding compliance with that jurisdiction’s specific requirements.

 

Properly maintaining a corporation and its records can be complicated and time consuming. If you need help or would like more information regarding creating, maintaining, or updating your corporation’s records, get in touch with our experienced team of business lawyers at CARREL+Partners LLP today.

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Disclaimer:

This publication is for general information purposes and is not to be taken as legal advice. The information within is current only to the date of publishing. If you have any questions regarding article content, please contact the author(s) directly.