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.
Among the documents you are likely to find in minute books, there are some that are required to be part of it by law. These are by-laws, articles of incorporation, certificate of incorporation, the minutes taken during directors and shareholder meetings, the resolutions by directors and shareholders, the shareholders register and ledgers, the share certificates and the shareholder agreements among several other documents considered official.
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.
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.
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.
Maintaining minute books can be done through different approaches. Most of organizations prefer to do it themselves. This however requires a detailed understanding of best practices by those charged with this duty. The other common practice is to hand over the duty to a lawyer who will charge small fee and take over the annual updating of documents.
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.
Given the important role minute books play in any organization, the proper maintenance practice must be carried out with the view of fulfilling legal requirements while at the same time saving organization resources that might be wastage from improper record keeping. As such, standards must be set in regards to this form of documentation.
Among the documents you are likely to find in minute books, there are some that are required to be part of it by law. These are by-laws, articles of incorporation, certificate of incorporation, the minutes taken during directors and shareholder meetings, the resolutions by directors and shareholders, the shareholders register and ledgers, the share certificates and the shareholder agreements among several other documents considered official.
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.
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.
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.
Maintaining minute books can be done through different approaches. Most of organizations prefer to do it themselves. This however requires a detailed understanding of best practices by those charged with this duty. The other common practice is to hand over the duty to a lawyer who will charge small fee and take over the annual updating of documents.
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.
Given the important role minute books play in any organization, the proper maintenance practice must be carried out with the view of fulfilling legal requirements while at the same time saving organization resources that might be wastage from improper record keeping. As such, standards must be set in regards to this form of documentation.
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