One of the requirements by law for all registered firms is that they maintain up-to-date records of deliberations and resolutions that arise at the firm official meetings. The records are contained in a binder or bound book and should be maintained at the firm registered office or official address for accessibility to all members of that firm. Minute books are basically binders or just files housing all corporate key resolutions and deliberations.
There are several documents that are required to be part of minute books. These include the certificates of incorporation and articles of incorporation, the minutes arising from official meetings such as those held by directors, shareholders and managers, the resolutions from the said meetings, the register of shareholders and that for ledgers, the share certificates, the agreements by shareholders and several other documents are may be specified by the company law.
The legal requirements for minute book vary from one jurisdiction to the other. While some laws do not specifically state that it must be kept by a corporation, there are a number of documents that are specifically outline in most jurisdictions as having to be maintained in an organized manner in a central place. The attempt to fulfill this requirement by itself brings about the minute book.
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.
In order to properly maintain these records, corporations have various options from which to choose from. They can either train their own staff so as to carry out this activity in a professional manner or engage their lawyer for the same job. Having employees do the job comes with many challenges such as loss of sensitive documents through the hands of interested parties. It also needs huge investment in employee training.
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.
The minute books are part and parcel of any organization. When well updated, the organization enjoys from many other advantages other than just fulfilling the legal requirements. This is where standards must be developed and budget set aside for this purpose.
There are several documents that are required to be part of minute books. These include the certificates of incorporation and articles of incorporation, the minutes arising from official meetings such as those held by directors, shareholders and managers, the resolutions from the said meetings, the register of shareholders and that for ledgers, the share certificates, the agreements by shareholders and several other documents are may be specified by the company law.
The legal requirements for minute book vary from one jurisdiction to the other. While some laws do not specifically state that it must be kept by a corporation, there are a number of documents that are specifically outline in most jurisdictions as having to be maintained in an organized manner in a central place. The attempt to fulfill this requirement by itself brings about the minute book.
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.
In order to properly maintain these records, corporations have various options from which to choose from. They can either train their own staff so as to carry out this activity in a professional manner or engage their lawyer for the same job. Having employees do the job comes with many challenges such as loss of sensitive documents through the hands of interested parties. It also needs huge investment in employee training.
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.
The minute books are part and parcel of any organization. When well updated, the organization enjoys from many other advantages other than just fulfilling the legal requirements. This is where standards must be developed and budget set aside for this purpose.
No comments:
Post a Comment