The Need For Well Maintained Minute Books In A Firm
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.
In most jurisdiction however, there is no specific phrase in law that specify that the minute books must be kept. Instead, the law requires that certain documents must be well maintained and updated for future use. In essence therefore, this can be translated to mean that this book is actually required to avoid being in the wrong sides of law.
Other than for legal requirements, there are several other advantages that come with keeping it in order. For instance, you are likely to avoid the cost of organizing one or updating it if it is well maintained and updated. This comes in terms of man hour saved and expenses that accompanies the same. When it comes to banking, the documents must also be in order so as to avoid delay in providing response and general delays in corporate banking activities such as loan processing.
It also comes in handy when engaging in major business decisions that may change ownership structure such as mergers, acquisition and the sale of business or even in the initial and subsequent sale of shares through public offering (changing from private limited to public limited). When conducting various forms of audit, be it internal, external or even government audit, the book is very necessary.
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.
In most jurisdiction however, there is no specific phrase in law that specify that the minute books must be kept. Instead, the law requires that certain documents must be well maintained and updated for future use. In essence therefore, this can be translated to mean that this book is actually required to avoid being in the wrong sides of law.
Other than for legal requirements, there are several other advantages that come with keeping it in order. For instance, you are likely to avoid the cost of organizing one or updating it if it is well maintained and updated. This comes in terms of man hour saved and expenses that accompanies the same. When it comes to banking, the documents must also be in order so as to avoid delay in providing response and general delays in corporate banking activities such as loan processing.
It also comes in handy when engaging in major business decisions that may change ownership structure such as mergers, acquisition and the sale of business or even in the initial and subsequent sale of shares through public offering (changing from private limited to public limited). When conducting various forms of audit, be it internal, external or even government audit, the book is very necessary.
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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