Maintaining records of the official meetings is not a matter of choice for registered corporation, it is a legal requirement. The result of this is the minute books; files that contain the records of discussion and decisions that took place in the official company meetings. These and other important documents are maintained in the registered office or an official address for easy access by authorized employees and other parties that may require the same.
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.
In a number of jurisdictions, the law does not specifically state that the book must be in existence. But the documentation in a proper manner and maintaining the same in a centralized place translates to keeping this book. As such, much effort and even budget is normally set aside for this purpose so as to keep in the safe side of laws.
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.
If the duty is trusted in hands of a lawyer, the firm benefits from their experience in legal matters covering documentation of records and deliberations, updating of documents is done well on time and the documents are more secured as they are out of reach of unauthorized employees and other individuals who may have conflict of interest.
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.
In a number of jurisdictions, the law does not specifically state that the book must be in existence. But the documentation in a proper manner and maintaining the same in a centralized place translates to keeping this book. As such, much effort and even budget is normally set aside for this purpose so as to keep in the safe side of laws.
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.
If the duty is trusted in hands of a lawyer, the firm benefits from their experience in legal matters covering documentation of records and deliberations, updating of documents is done well on time and the documents are more secured as they are out of reach of unauthorized employees and other individuals who may have conflict of interest.
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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