Who this is for
- Owners and directors of a newly incorporated Canadian corporation
- Corporations paying a first dividend or filing a first T2
- Corporations whose minute book was never set up or has fallen behind
Not covered here
- Book entries for dividends, share capital and shareholder loans
- Filing the annual return with the corporate registry
- Choosing share classes or drafting articles and by-laws
- Legal advice on fixing past corporate acts
What is a minute book, and does a corporation need one?
A minute book is the binder or digital file that holds a corporation's legal records, and keeping those records is required. A federal corporation must keep its articles and by-laws, minutes and resolutions of shareholders, copies of director notices filed with Corporations Canada, and a securities register, plus minutes and resolutions of the directors and adequate accounting records (Canada Business Corporations Act, section 20). The Act does not use the words "minute book"; Corporations Canada says corporations often keep these records in a single book by that name (Corporations Canada). Provincial corporations have similar duties under their own acts.
The minute book can be paper, a loose-leaf binder or an electronic system, as long as it can reproduce the records in readable written form within a reasonable time. The corporation must take reasonable precautions against loss, destruction and falsified entries (section 22). Failing to keep the records without reasonable cause is an offence with a fine of up to $5,000 (section 20(6)); not keeping the register of individuals with significant control, or not sending its information to Corporations Canada, carries a fine of up to $100,000 (section 21.1(6); section 21.21(4)).
A minute book is simple to keep from the first day. A case stops being simple when:
- shares were never formally issued, or were recorded as issued before they were paid for;
- dividends were paid with no directors' resolution;
- owners or directors changed and the registers were not updated;
- a first dividend or a first T2 is due and the minute book was never set up;
- the minute book is being rebuilt years later for a bank or a buyer.
Gather the certificate and articles of incorporation, any by-laws and resolutions ever signed, share certificates or register entries, proof of what each shareholder paid for their shares, a list of every ownership and director change since incorporation, and bank records of money each owner put in or took out.
What goes in a new corporation's minute book on day one?
On day one, a new corporation's minute book holds its founding documents, the organizing resolutions that put directors in place and issue the first shares, and the registers that record who owns and controls it. This table follows the federal Act; provincial acts have close equivalents.
| Item | What it records | Federal rule |
|---|---|---|
| Certificate and articles of incorporation | The corporation's existence, name, share classes, director range and any share transfer restrictions | Articles kept under section 20(1)(a) |
| By-laws | Rules for meetings, officers, signing and banking | Directors make them by resolution; shareholders confirm, amend or reject them at the next meeting (section 103) |
| Notices of registered office and of directors | The registered office address and the first directors, filed with the articles | Sent with the articles (section 19(2); section 106); a copy of the director notice is kept under section 20(1)(c) |
| First directors' resolutions | Adopting by-laws, issuing the first shares, appointing officers | A written resolution signed by all directors is as valid as a meeting and is kept with the directors' minutes (section 117) |
| First shareholders' resolutions | Confirming by-laws, electing directors, deciding on an auditor | A written resolution signed by all voting shareholders is as valid as a meeting (section 142) |
| Share subscriptions and certificates | Who agreed to buy which shares and for what | A share is not issued until it is fully paid in money, property or past services; a promissory note from the buyer does not count (section 25). Each holder may ask for a certificate or a written acknowledgment (section 49) |
| Securities register | Every share issued and transferred | See the next section |
| Register of individuals with significant control | Who ultimately owns or controls the corporation | See the next section |
The corporation also keeps a separate stated capital account for each class of shares and adds to it the full amount received for shares issued, though it may add less when it issues shares for property from a related (non-arm's length) person (section 26). For the book entries behind that account, see books for a new CCPC. For which share classes to create, see share classes when you incorporate. If the corporation was set up online, check which of these items were actually prepared: see what is left after incorporating online.
Which registers must a corporation's minute book hold?
A federal corporation's minute book holds a securities register and, for most private corporations, a register of individuals with significant control. The federal Act does not list a separate register of directors; it requires copies of the director notices filed with Corporations Canada. Ontario and British Columbia do require a register of directors.
| Register | What it shows | When to update it |
|---|---|---|
| Securities (share) register | For each class, every past and present holder's name and latest known address, the number of shares held, and the date and details of each issue and transfer (section 50) | Each time shares are issued or transferred |
| Director records | Copies of the notice of directors and every notice of change (section 20(1)(c)) | The corporation sends Corporations Canada a notice within 15 days after a change among its directors or after receiving a director's notice of a new address (section 113) |
| Register of individuals with significant control | Each such individual's name, date of birth, residential address, citizenship, tax residence, the dates they became or ceased to be one, and how they hold control (section 21.1) | Reasonable steps at least once in every financial year, and new information recorded within 15 days of the corporation becoming aware of it |
An individual with significant control generally owns, controls or directs 25% or more of the shares by votes or value, alone or with others, or has control in fact without owning shares (Corporations Canada). A federal corporation also sends this information to Corporations Canada when it is incorporated, amalgamated or continued, every year with its annual return, and within 15 days of a change to the register (section 21.21). Public and Crown corporations are exempt.
What must be added to the minute book each year?
Each year, a federal corporation adds the annual shareholder business (financial statements, the auditor decision and any director elections), every dividend resolution, and any change to its registers. A written resolution signed by all voting shareholders can replace the annual meeting (section 142).
| Yearly item | Federal rule |
|---|---|
| Annual meeting or written resolution | First within 18 months of incorporation, then within 15 months of the last one and no later than six months after the financial year ends (section 133) |
| Financial statements | Directors approve them, shown by a director's signature (section 158), and place them before the shareholders (section 155); a copy goes to each shareholder at least 21 days before the annual meeting or before the written resolution replacing it is signed, unless the shareholder declined in writing (section 159) |
| Auditor decision | Shareholders of a private (non-distributing) corporation may resolve not to appoint an auditor, but only with every shareholder's consent, including non-voting shareholders, and only until the next annual meeting (section 163). The waiver is renewed every year |
| Director election | Directors are elected for terms ending no later than the third annual meeting after election; a director with no stated term leaves office at the next annual meeting (section 106) |
| Dividend resolutions | One for each dividend declared (see the accountant section below) |
| Individuals with significant control | The once-a-year review of the register (section 21.1) |
| Annual return | A filing with the corporate registry, separate from the T2 (section 263); keep the filing confirmation with the records |
For due dates and fees of the annual return, see the corporate annual return.
Who keeps the minute book current?
The duty belongs to the corporation, which acts through its directors. The federal Act says the corporation "shall prepare and maintain" the records (section 20), and the directors decide where they are kept. Nothing in the Act requires a lawyer: an owner-director can prepare the resolutions and keep the registers, and incorporate yourself or use a lawyer covers when paying for help makes sense. Directors can arrange for someone else, such as the corporation's lawyer, to hold and update the book, and an agent may keep the securities register (section 50(2)), but the corporation stays responsible. A director or officer who knowingly permits the corporation to break the register rules for individuals with significant control, or records false information in that register, commits an offence personally, as does a shareholder who knowingly fails to answer the corporation's request for that information accurately and completely. The fine is up to $200,000 or two years in prison on summary conviction, and up to $1,000,000 or five years on indictment (section 21.4; section 21.1(4)).
Where must the minute book be kept, who can see it, and for how long?
A federal corporation keeps its articles, by-laws, shareholder minutes, director notices and securities register at its registered office or another place in Canada the directors designate. Shareholders and creditors may look at most of them; the directors' minutes and accounting records are for directors. Minutes and share records are kept until two years after the corporation is dissolved.
Where. Directors' minutes and accounting records may be kept where the directors think fit, but if accounting records are kept outside Canada, enough of them to show the financial position each quarter stay in Canada (section 20(4) and (5)). Any of the corporation's records, including the articles and registers, may be kept outside Canada if they can be inspected electronically at the registered office or another designated place in Canada (section 20(5.1)). Tax records follow a stricter rule: the CRA says records kept outside Canada and accessed electronically from Canada are not considered kept in Canada, unless the CRA gives permission (CRA).
Who can see it.
| Person | What they may examine |
|---|---|
| Shareholders and creditors | Articles, by-laws, any unanimous shareholder agreement, shareholder minutes and resolutions, director notices and the securities register, free, during usual business hours (section 21) |
| Directors | Also the directors' minutes and resolutions and the accounting records (section 20(4)) |
| Corporations Canada | The register of individuals with significant control, on request (section 21.3) |
| The public | From what a federal corporation files with Corporations Canada: each such individual's name, address for service (or residential address if none was given), and when and how they hold significant control; not for minors, and withheld in limited cases on application (section 21.303) |
| Police and tax authorities, including the CRA | A copy of that register, on a request that meets the Act's conditions (section 21.31) |
How long. Directors' and shareholders' minutes, share ownership and transfer records and the general ledger are kept for as long as the corporation exists and until two years after it is dissolved (Income Tax Regulations, section 5800). The CRA puts it as keeping the share registry indefinitely, because it affects any later sale or wind-up (CRA). The register of individuals with significant control is the exception: a federal corporation disposes of a former individual's personal information within one year after the sixth anniversary of the day they stopped having significant control (section 21.1(5)). The federal Act keeps accounting records for six years after the financial year they relate to (section 20(2.1)), and most other tax records are kept for six years from the end of the tax year they relate to (Income Tax Act, section 230); see how long to keep business records.
Why does my accountant ask for the minute book?
An accountant uses the minute book to confirm that what the books and tax filings say happened was actually authorized: who owns the shares, what was paid for them, and which payments to owners were dividends.
| Filing or entry | What the accountant checks in the minute book |
|---|---|
| Dividends and the T5 | Under the federal Act, the board declares dividends and cannot delegate that power to a committee or managing director (section 115(3)). The resolution's share class and amount should match the T5 slips for dividends paid to residents of Canada (CRA), due by the last day of February after the dividend year, and the dividends declared on the T2's financial statements. A shareholder who is not resident in Canada gets an NR4 slip instead, and the corporation withholds non-resident tax, owing that tax itself if it does not (Income Tax Act, section 212; section 215(6); CRA). How to declare a dividend, including the solvency test, is in declaring and paying a dividend; which year's T5 it goes on is in dividend before or after year-end |
| Share capital on the T2 | The common and preferred share capital on the T2 balance sheet should match the shares issued in the register and the stated capital recorded for each class. Paid-up capital, the tax version of share capital, is generally based on that corporate-law figure, with adjustments in some transactions (Income Tax Act, section 89(1)) |
| Schedule 50 | Every private corporation lists each shareholder holding 10% or more of its common or preferred shares (CRA Schedule 50); the securities register is the source |
| Shareholder loan or dividend | Money an owner took with no dividend resolution and no payroll usually sits in the books as owed by the shareholder |
The last row matters because a loan from a corporation to a shareholder is generally included in the shareholder's income unless an exception applies (Income Tax Act, subsection 15(2)). The repayment rule and how to clear the balance are in shareholder loans. For the entries that record a dividend, see recording dividends in the books.
What if the minute book was never set up or is out of date?
Start now: collect what exists, then have the directors and shareholders sign resolutions that record or approve what is missing. A resolution signed now carries the date it is signed; whether it can take effect from an earlier date is a question for a corporate lawyer.
- Collect the certificate, articles, filed notices, any signed resolutions, and bank records showing what each shareholder paid for shares.
- List every event since incorporation: shares issued or transferred, directors added or removed, dividends paid, money taken by owners.
- Rebuild the securities register and the register of individuals with significant control from those facts, and file any director or significant-control notices that are late.
- Have the directors adopt by-laws. If shares were never issued, who receives them, for what payment and from which date is decided with a corporate lawyer and the accountant before anything is signed; a share is issued only once it is fully paid (section 25).
- Bring the yearly items up to date (financial statements, auditor decisions, director elections), with a lawyer's help where years were missed.
If a register shows the wrong owner, a court can order it corrected (section 243). The tax side matters as well: how money taken in past years is treated, as a dividend, salary or shareholder loan, can change the T2, the T5 slips and the owner's personal returns, so it needs to be settled before those are filed.
How do the rules differ in Ontario, British Columbia, Alberta and Quebec?
A provincial corporation keeps its records under its own province's act. A federal corporation keeps them under the federal Act, though registering in a province can add that province's filing rules. One line each:
- Ontario: a corporation also keeps a register of directors and a register of any land it owns in Ontario (Business Corporations Act, section 140). A privately held Ontario corporation must keep a register of individuals with significant control, which it can keep at its registered office; it is not filed with a registry (Ontario).
- British Columbia: a company keeps its records at its records office, including its central securities register (unless the directors designate another place), a register of directors, and all minutes and consent resolutions (Business Corporations Act, section 42); private companies also keep a transparency register there that the public cannot see (BC transparency register). Meeting minutes are not filed with the annual report (BC incorporated companies).
- Alberta: a corporation keeps its records at its records office (Business Corporations Act, section 21); the Act as currently published has no register of individuals with significant control, though the province has consulted on requiring private companies to keep ownership and control records.
- Quebec: certain enterprises must also declare their ultimate beneficiaries to the Registraire des entreprises, which makes their identity public (Québec).
To compare federal and provincial incorporation, see federal or provincial incorporation.
Example
These examples are illustrative; figures are in Canadian dollars.
A new federal corporation sets up its minute book
An owner incorporates federally and is the only director and shareholder. The minute book on day one holds the certificate and articles, the notice of directors, by-laws adopted by directors' resolution and confirmed by shareholders' resolution, a directors' resolution issuing 100 common shares for C$100 once the C$100 is paid, a share certificate, a securities register entry, and a register of individuals with significant control naming the owner. On the first T2, the balance sheet shows C$100 of common share capital, and Schedule 50 lists the owner.
Withdrawals with no dividend resolution
An owner takes C$40,000 from the corporation's account over the year, with no payroll, no dividend resolution and no money the corporation owed the owner. At year-end the books show C$40,000 owed by the shareholder. For the accountant to report a dividend on a T5, the minute book needs a directors' resolution declaring it. Without one, the amount stays owed by the shareholder, and a shareholder loan is generally included in the owner's income unless it is repaid in time or another exception applies. Whether a dividend declared now can cover amounts taken earlier, and for which year, is settled with the accountant and a lawyer before the T2 and T5 are filed.
A buyer asks for the minute book
Five years after incorporating, the corporation agrees to sell its business. The buyer's lawyer asks for the minute book and finds no resolution issuing the founder's shares and no register of individuals with significant control. The corporation signs current resolutions, rebuilds the registers, and the lawyers decide how to deal with the share issuance before closing.
Different for you?
- You are paying a first dividend or filing a first T2: the dividend resolutions, share register and books have to agree before the T2 and T5 are filed. See declaring and paying a dividend, then get corporate tax help.
- You incorporated online, the minute book was never set up, or a bank or buyer has asked for it: see what is left after incorporating online. Missing resolutions are a legal task; for the books and tax registrations that must match them, see business formation help.
- Owners took money with no dividend resolution: see shareholder loans, dividend before or after year-end and paying yourself a salary after the fact, and get corporate tax help before the T2 and T5 are filed.
- You need the book entries for a dividend or for share capital, or the books no longer match the minute book: see recording dividends in the books and books for a new CCPC, or get bookkeeping help.
- An owner lives outside Canada: see incorporating in Canada from abroad and get cross-border tax help before the first dividend.
- You missed annual returns or the corporation was dissolved: see the corporate annual return or reviving a dissolved corporation.
- You have not incorporated yet: see how to incorporate in Canada.
Figures on this page
| Figure | Value | Source |
|---|---|---|
| Maximum fine for a federal corporation that fails to keep its corporate records Canada Business Corporations Act subsection 20(6): a corporation that, without reasonable cause, fails to comply with section 20 is liable on summary conviction to a fine not exceeding five thousand dollars | $5,000 | Canada Business Corporations Act, section 20 Checked |
| Maximum fine for a federal corporation that breaks the significant-control register or filing rules Canada Business Corporations Act subsections 21.1(6) (keeping the register) and 21.21(4) (sending the information to the Director): on summary conviction, for a contravention without reasonable cause | $100,000 | Canada Business Corporations Act, section 21.1 Checked |
| Federal corporation director-change notice deadline From a change among directors to notice to Corporations Canada under the Canada Business Corporations Act | 15 days | Canada Business Corporations Act: subsection 113(1) Checked |
| Federal ISC register update deadline From when a federal corporation learns of a change affecting its ISC register | 15 days | Corporations Canada: Individuals with significant control Checked |
| Federal corporation significant-control share threshold At least this share of voting rights or fair market value can make an individual an individual with significant control; control in fact can also qualify | 25% | Corporations Canada: Individuals with significant control Checked |
| Federal ISC change filing deadline From a change to a federal corporation's ISC register | 15 days | Corporations Canada: Individuals with significant control Checked |
| Minimum notice for sending annual financial statements to shareholders Canada Business Corporations Act subsection 159(1): not less than twenty-one days before each annual meeting or before a written resolution in lieu of it is signed, except to a shareholder who declined in writing; a 2018 replacement of subsection 159(1) is not in force | 21 days | Canada Business Corporations Act, section 159 Checked |
| Maximum fine on summary conviction for a director, officer or shareholder significant-control offence Canada Business Corporations Act paragraph 21.4(5)(a): or imprisonment for up to two years, or both; covers offences under subsections 21.4(1) to (4) | $200,000 | Canada Business Corporations Act, section 21.4 Checked |
| Maximum fine on indictment for a director, officer or shareholder significant-control offence Canada Business Corporations Act paragraph 21.4(5)(b): or imprisonment for up to five years, or both; covers offences under subsections 21.4(1) to (4) | $1,000,000 | Canada Business Corporations Act, section 21.4 Checked |
| CRA retention after corporate dissolution After the date of dissolution for records supporting the corporation's tax obligations and entitlements; other laws may require longer retention | Two years | CRA: Where to keep your records, for how long and how to request permission to destroy them early Checked |
| Federal corporate-law retention period for accounting records Canada Business Corporations Act subsection 20(2.1): after the end of the financial year to which the records relate, subject to any longer federal or provincial retention period | Six years | Canada Business Corporations Act, section 20 Checked |
| General business-record retention period From the end of the last tax year to which the records and supporting documents relate; longer retention can apply | Six years | CRA: Where to keep your records, for how long and how to request permission to destroy them early Checked |
| T5 filing deadline T5 slips are filed and sent to recipients by this date; weekend and holiday rules may shift the CRA due date | The last day of February after the dividend year | CRA: T5 information return due date Checked |
| Private corporation Schedule 50 shareholder threshold A private corporation completes Schedule 50 for any shareholder holding at least this share of its common and/or preferred shares | 10% | CRA: Schedule 50, Shareholder Information Checked |
Primary sources
- Corporations Canada: Corporate records and other corporate obligations
- Corporations Canada: Individuals with significant control
- Canada Business Corporations Act, section 20 (corporate records)
- Canada Business Corporations Act, section 21 (access to records)
- Canada Business Corporations Act, section 21.1 (register of individuals with significant control)
- Canada Business Corporations Act, section 50 (securities register)
- Canada Business Corporations Act, section 142 (shareholder resolution in lieu of meeting)
- Canada Business Corporations Act, section 117 (directors' written resolutions)
- Income Tax Act, section 230 (records and books)
- Canada Business Corporations Act, section 21.21 (sending significant-control information to the Director)
- Canada Business Corporations Act, section 21.4 (significant-control offences)
- Canada Business Corporations Act, section 159 (financial statements to shareholders)
- Income Tax Act, section 212 (tax on dividends paid to non-residents)
- Income Tax Act, section 215 (withholding on payments to non-residents)
- CRA: NR4, Non-Resident Tax Withholding, Remitting, and Reporting
- Income Tax Regulations, section 5800 (retention periods)
- CRA: Where to keep your records, for how long and how to request permission to destroy them early
- CRA: Schedule 50, Shareholder Information
- CRA: When you have to prepare a T5 slip
- British Columbia: Business Corporations Act, section 42 (records office records)
- Ontario: Business Corporations Act, section 140 (records)
- British Columbia: Incorporated companies
- British Columbia: Transparency register
- Ontario: Beneficial ownership information requirements
- Alberta: Business Corporations Act
- Alberta: Beneficial ownership engagement
- Québec: About the new obligations for corporate transparency
About this guide
Published by Cloud Accounting under standing professional approval. This version has no separately recorded personal review. It explains general rules for the tax year shown. It is not advice for your situation.
Changes
- : First published.