Cunning Law takes care of your administrative headaches so that you can focus on running your business.
As a business owner, you are legally required to properly prepare and maintain records and keep up with annual filings. Many new business owners are not aware of this. Failure to do so can result in the following consequences:
Involuntary Dissolution: Companies that fail to file the annual reports lose their good standing and can be involuntarily dissolved. After two consecutive years, the corporation’s assets “escheat” to the government.
Lawsuits: Directors can be sued for violating their duty of care owed to the corporation.
Fines and Penalties: There can be fines ranging from $2,000 to $100,000 depending on the violation.
Deficiencies: You will have to incur significant legal expenses to rectify deficiencies if your business undergoes a Canada Revenue Agency audit or is sold.
Some examples of corporate records that must be diligently maintained are articles of incorporation, annual filings, corporate resolutions, shareholders’ agreements, meeting minutes, registers of directors and officers, central securities register, financial statements, cancelled share certificates, transparency register, certificate of incorporation, etc.
All of these corporate records go into a book called a “minute book.”
A records office is the location where the company’s corporate records are kept. These records (i.e., minute book) must be made available during business hours for inspection.
A registered office is the location where the corporate registry sends annual reports. Moreover, if the company is ever sued, then the court documents will be sent to the registered office. If the corporation does not respond to the court action with 21 days (or 14 days for Small Claims actions), then the person suing may obtain a default judgement. This essentially means that you lose by default.
The registered office must be located in British Columbia if you have a BC corporation or in Canada if you have a Canadian federal corporation.
Running your business is already hard enough work. Why not delegate the handling of your corporate records to a professional? Cunning Law is passionate about helping entrepreneurs and small businesses relieve their administrative headaches. Enlist the help of an experienced business lawyer for maintaining your minute books. Our law firm will ensure that it is done properly and seamlessly.
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