Everyone knows that keeping minutes of board meetings is
tedious. In addition to that, no one really knows how to do it
properly. For example, how detailed should they be? What has to be
included and what doesn't? Can the minutes get you into
trouble? Can they get you out of trouble? By law, corporations are
required to keep minutes of meetings of directors. But what the law
does not spell out is how to do it or even the risks and rewards of
recording minutes. Here are some.
ADVANTAGES OF MINUTES
Minutes direct officers to take actions.
They serve as proof that the board gave its officers the
authority to take actions necessary for the business.
In the event of litigation, the minutes can be used as evidence
in support of corporate defences, such as due diligence and
They can also establish that a lawyer was instructed to start a
DISADVANTAGES OF MINUTES
Except in rare circumstances, minutes are not privileged. As
such, if they are considered relevant to a case, the minutes will
have to be produced to any adverse party in a lawsuit or a
An adverse party can use your minutes to show that insufficient
steps were taken to establish a corporate defence you may wish to
Minutes can be problematic in a lawsuit if there are
contradicting notes or other evidence from the same time
CAUTIONARY POINTS REGARDING MINUTES
Consider interpreting your minutes from the perspective of an
adverse party in a lawsuit and then write your minutes
While accuracy is important, you have to have flexibility in
deciding what to include.
Ensure that the person writing the minutes is trained. Leaving
it to an inexperienced administrative assistant is not wise.
Record that a decision was made, but do not forget to include
the process and discussion surrounding how that decision was
There is no need to transcribe what was exactly said and by
whom. A general record of the discussions and comments made is
enough. Meetings discuss issues that are quite preliminary and not
well-thought out, leading to members making uninformed comments.
Having those types of discussions recorded with attribution may be
more harmful than good. That being said, there are limited
circumstances where having a transcript may be beneficial.
Make the minutes promptly after the meeting and circulate them
for approval. Have the minutes formally approved at the next board
Consider making it a policy that upon formal approval, all
personal notes of directors made during the meeting are destroyed.
Personal notes are not privileged, and in the event of litigation
they must be produced. Thus, if inconsistent or contradictory notes
of a board member remain available, the benefit of having kept good
meeting minutes is defeated.
Dissent from a decision insulates a director for liability for
that decision but you must dissent properly. If you are present at
a meeting, or abstain from voting, you are deemed to have consented
unless your dissent is recorded in the minutes. You can send in a
written dissent to the secretary before the meeting ends or by mail
to the registered office immediately after the meeting is
terminated. If you were not present, you must mail in your dissent
within 7 days of becoming aware of a resolution after the
People often take minutes of other sorts of meetings as well.
These sorts of minutes are generally not regulated by statutes and
therefore may not be subject to the same standards as minutes of
directors meetings. However, if you have taken minutes they will be
producible in litigation so you are well advised to follow best
practices in relation to those minutes as well.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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