Six Most Common Problems in Maintaining Corporate Minute
There are tens of thousands of small corporations in Alberta.
Many of them are private corporations with fifteen or fewer
shareholders. Many small corporations use an individual
shareholder's or director's home address as the address for
service and maintain their own minute books and corporate
The maintenance of many of these corporations' minute books
is, however, often less than stellar. Here are some of the most
common problems in the maintenance of corporate minute books and
corporate records, and the obvious solution:
The primary problem most corporations face is the non-filing of
annual returns. These filings often get overlooked by individuals
maintaining their own minute books, or get put off to a later date.
The danger with this approach is that one year past the date when
the annual return is due in Alberta, the corporation slips into
delinquent status and Corporate Registry takes steps to begin
dissolution. When the corporation is "struck", it is
struck from the Register at Corporate Registry. In other words, it
is no longer able to carry on business. The corporation may be
revived, but while struck the shareholders may not enjoy the rights
and protections that usually prompt incorporation in the first
place. It is far better to keep your corporation's status
current. If a corporation is registered to carry on business in
other provinces, the corporation must also file annual returns in
those other provinces on a timely basis.
Many corporations do not pass annual resolutions of directors
and shareholders, which in the majority of private corporations are
used in lieu of meetings of shareholders and directors. Either a
resolution or meeting of shareholders is required by the Alberta
Business Corporations Act.
Minute Books are generally not maintained in an orderly fashion
when individuals maintain their own minute books. Often annual
returns and resolutions or other corporate minutes are not placed
in the minute book and share certificates are lost. All of these
problems are curable but better to avoid in the first place.
Incomplete records may cause significant timing or other problems
should your corporation wish to embark on a significant
Certain transactions, the most obvious example being the
transfer of shares, are not properly implemented because of lack of
knowledge on behalf of the individual maintaining the minute book.
Usually parties in this situation do not realize that
directors' resolutions authorizing the transfer of shares or
further resolutions authorizing other transactions are required.
The resolutions may not be passed or if passed, may not be properly
completed. This could be the cause of significant corporate or tax
Notices that must be filed with Corporate Registry are often
overlooked, such as a change of Corporate address. Notices of
changes in directors are required to be filed within a specified
time. Significant problems and possible liability could result. The
documents filed with Corporate Registry are the records available
to the public.
Another major problem for corporations maintaining their own
records is what happens to legal documents served on the
Corporation. Often these documents get put aside, lost or are held
until the person responsible comes back from vacation. Often the
limitation period for filing a defence has expired and the
corporation is noted in default. Often the people receiving the
served documents do not understand that the corporation is being
sued and that serious consequences could result from not
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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