We frequently remind clients of the requirement to maintain current minute books. It is a legal obligation that often gets neglected as the operations of the company continue and no one comes asking. For one thing, when faced with a CRA audit, it is not pleasant to add updating the minute book to the list of tasks to prepare for the audit. Another unpleasant surprise is when we begin negotiations to sell all or a part of the company, and realize that updating the minute books will be added to the time and cost of concluding the sale. A third commonly encountered issue is the transfer of shares upon the death of a shareholder in a closely held corporation, such as a family business, triggering the need to update the minute book without the ability to have an original signature. While none of those problems is insurmountable, it is certainly preferable to update the minute book on an annual basis and following any major changes in the organization. 

Soon, corporations will have another record keeping requirement. Effective December 16, 2016, the Ontario Business Corporations Act will have a new section 140.1 mandating that “A corporation shall prepare and maintain at its registered office a register of its ownership interests in land in Ontario.” This will immediately apply for new companies incorporated on or after December 16, 2016. Existing companies will have two years to come into compliance with this requirement.

The register will have to identify the land, as well as state when a corporation acquired and, if applicable, disposed of the land. The paperwork associated with acquiring, transferring ownership, and/or selling the property must be kept. This will assist to identify the municipal address, if there is one, the unique Property Identification Number in our land registration systems, the legal description, and the assessment roll number, if any.

This additional record keeping requirement is not likely to be onerous for most of our clients, but it is important to start thinking about and not leave the creation of the register to December 15, 2018 for existing companies!