Maintaining records of the official meetings is not a matter of choice for registered corporation, it is a legal requirement. The result of this is the minute books; files that contain the records of discussion and decisions that took place in the official company meetings. These and other important documents are maintained in the registered office or an official address for easy access by authorized employees and other parties that may require the same.
Among the documents you are likely to find in minute books, there are some that are required to be part of it by law. These are by-laws, articles of incorporation, certificate of incorporation, the minutes taken during directors and shareholder meetings, the resolutions by directors and shareholders, the shareholders register and ledgers, the share certificates and the shareholder agreements among several other documents considered official.
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.
If the duty is trusted in hands of a lawyer, the firm benefits from their experience in legal matters covering documentation of records and deliberations, updating of documents is done well on time and the documents are more secured as they are out of reach of unauthorized employees and other individuals who may have conflict of interest.
Given the important role minute books play in any organization, the proper maintenance practice must be carried out with the view of fulfilling legal requirements while at the same time saving organization resources that might be wastage from improper record keeping. As such, standards must be set in regards to this form of documentation.
Among the documents you are likely to find in minute books, there are some that are required to be part of it by law. These are by-laws, articles of incorporation, certificate of incorporation, the minutes taken during directors and shareholder meetings, the resolutions by directors and shareholders, the shareholders register and ledgers, the share certificates and the shareholder agreements among several other documents considered official.
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.
If the duty is trusted in hands of a lawyer, the firm benefits from their experience in legal matters covering documentation of records and deliberations, updating of documents is done well on time and the documents are more secured as they are out of reach of unauthorized employees and other individuals who may have conflict of interest.
Given the important role minute books play in any organization, the proper maintenance practice must be carried out with the view of fulfilling legal requirements while at the same time saving organization resources that might be wastage from improper record keeping. As such, standards must be set in regards to this form of documentation.
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