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.
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 requirements, there are several other advantages that come with keeping it in order. For instance, you are likely to avoid the cost of organizing one or updating it if it is well maintained and updated. This comes in terms of man hour saved and expenses that accompanies the same. When it comes to banking, the documents must also be in order so as to avoid delay in providing response and general delays in corporate banking activities such as loan processing.
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.
Maintaining minute books can be done through different approaches. Most of organizations prefer to do it themselves. This however requires a detailed understanding of best practices by those charged with this duty. The other common practice is to hand over the duty to a lawyer who will charge small fee and take over the annual updating of documents.
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.
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 requirements, there are several other advantages that come with keeping it in order. For instance, you are likely to avoid the cost of organizing one or updating it if it is well maintained and updated. This comes in terms of man hour saved and expenses that accompanies the same. When it comes to banking, the documents must also be in order so as to avoid delay in providing response and general delays in corporate banking activities such as loan processing.
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.
Maintaining minute books can be done through different approaches. Most of organizations prefer to do it themselves. This however requires a detailed understanding of best practices by those charged with this duty. The other common practice is to hand over the duty to a lawyer who will charge small fee and take over the annual updating of documents.
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.
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.
About the Author:
Get a summary of the advantages of purchasing minute books online and view our selection of books at http://www.mchines.com right now.
No comments:
Post a Comment