The Significance Of Maintaining And Updating Minute Books In A Firm
Legally, there are several requirements that any corporation must meet before and after being incorporated in all jurisdictions world over. Among these, proper documentation and maintenance of the same documents tops the list. For registered firms in particular, failure to properly maintain important documents risks being deregistered. An up to date documents and deliberations are normally filled or contained in a binder in the firm official address such as registered office for access by employees and government agencies. These are what are known as minute books, collection of all important records and key resolutions in official meetings.
Other than the minutes (including resolutions) recorded during major meetings, there are several other documents that in practice, are kept together as part of minute books. The most common documents that are kept together with these records are the certificate of incorporation, the articles of incorporation, share holder register, the shareholder ledgers, the share certificates and all other binding agreements that the firm has entered into as may be specified by the company law.
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.
Other than for legal obligation, proper documentation of company records comes with several other advantages. It makes the management and general operation smoother as retrieval and reference can be achieved much faster. This also saves on unnecessary expenses, reduces wastage of man hour and contributes to overall profitability. This may not be the case if locating such documents was to be done at a future date long after it is overdue.
The other significance of keeping documents in order is to avoid unnecessary penalties, delay in change or ownership structure such as mergers, takeover, selling the corporation, going public (initial public offer). In case the corporation is in default of notice filings that are mandatory, its certificate of incorporation risks being cancelled. The document also comes in handy when performing internal audit, external audit and government audit where the documents are required.
There are a number of approaches that a corporation may resolve to when maintaining minute books. The most common practice however is to do it themselves or entrust the services to an external lawyer for a fee. The process of entrusting the job to employees can be challenging. Other than significant training that employees will have to go through, there is likelihood of conflict of interest.
In that case, a lawyer may take over the process. This comes with several advantages to the firm. They are better equipped with the necessary skills required to properly maintain the legally required documents, the access is denied from unauthorized persons, there are no likelihood of lost documents and delays among several other advantages.
All deliberations and resolutions arising from an official meeting must be well documented and properly maintained in minute books for future reference. The job can only be carried out by well experienced staff or lawyers, as such; a significant portion of a firm budget should be directed to this.
Other than the minutes (including resolutions) recorded during major meetings, there are several other documents that in practice, are kept together as part of minute books. The most common documents that are kept together with these records are the certificate of incorporation, the articles of incorporation, share holder register, the shareholder ledgers, the share certificates and all other binding agreements that the firm has entered into as may be specified by the company law.
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.
Other than for legal obligation, proper documentation of company records comes with several other advantages. It makes the management and general operation smoother as retrieval and reference can be achieved much faster. This also saves on unnecessary expenses, reduces wastage of man hour and contributes to overall profitability. This may not be the case if locating such documents was to be done at a future date long after it is overdue.
The other significance of keeping documents in order is to avoid unnecessary penalties, delay in change or ownership structure such as mergers, takeover, selling the corporation, going public (initial public offer). In case the corporation is in default of notice filings that are mandatory, its certificate of incorporation risks being cancelled. The document also comes in handy when performing internal audit, external audit and government audit where the documents are required.
There are a number of approaches that a corporation may resolve to when maintaining minute books. The most common practice however is to do it themselves or entrust the services to an external lawyer for a fee. The process of entrusting the job to employees can be challenging. Other than significant training that employees will have to go through, there is likelihood of conflict of interest.
In that case, a lawyer may take over the process. This comes with several advantages to the firm. They are better equipped with the necessary skills required to properly maintain the legally required documents, the access is denied from unauthorized persons, there are no likelihood of lost documents and delays among several other advantages.
All deliberations and resolutions arising from an official meeting must be well documented and properly maintained in minute books for future reference. The job can only be carried out by well experienced staff or lawyers, as such; a significant portion of a firm budget should be directed to this.
Post a Comment