Corporate maintenance, governance and compliance

Corporate maintenance, governance and compliance

Every corporation is required to keep a corporate minute book. A corporate minute book is a physical or digital repository that contains important documents and records related to a corporation’s formation, governance, and ongoing operations. It serves as a comprehensive record of the corporation’s activities and decisions and is typically maintained by the company’s secretary or another designated individual.

Under the Ontario Business Corporations Act, a corporation is required to keep in one book, a record containing the Articles of Incorporation, the corporate by-laws, and the resolutions of the directors and shareholders, along with ledgers and registers of the corporation’s principals. The initial resolutions set out in the corporate minute book include the names of the directors, shareholders, president, secretary, CEO and COO. They also set out the corporation’s fiscal year end, its corporate accountant, corporate bank, corporate lawyer and registered head office.

Don’t Have a Corporate Minute Book or Haven’t Updated Your Corporate Minute Book?

Do you have a corporation but have neglected to keep proper corporate records in a minute book? We can help. All too common, we prepare retroactive resolutions that bring your corporate minute book up to date and in good standing. If you have no minute book at all, we will reconstruct one. To this end, we will prepare statutory declarations, supporting resolutions, and obtain an official physical minute book for your corporation. Within a week’s time, your corporation will be in good standing.

Annual Compliance

Each year a corporation is required to do three things:

1. File a T2 Income Tax Return with the CRA – this is the work of accountants;
2. Prepare annual resolutions to update the corporate minute book; and
3. File an annual corporate return with the Ontario Business Registry or with Corporations Canada.

Lawyers assist with items 2 and 3 above. A separate annual corporate return is a new concept that was introduced in 2021. Prior to 2021, your accountant would file both the tax return and the corporate return in one single filing. In 2021, the provincial government untied these two actions such that accountants only file the income tax return and leave the corporate return unfiled. It is however imperative that the corporate return be filed. If the return is not filed for successive years, the government will forcibly dissolve your corporation.

The deadline to prepare and file an income tax return, prepare annual resolutions and file the annual corporate return for Ontario companies is six months from the fiscal year end of the corporation. The fiscal year end of the corporation was selected by the corporation’s owners or accountants on incorporation. For federal companies however the corporate return is due within two months of the anniversary of the incorporation date of the corporation.

For both federal and Ontario companies, you will need the company key in order to file the return. The key is a unique identifier similar to a SIN that allow you to access the governments system in relation to a corporation. If you do not have a company key, we can request one for you.

Other Year-End Resolutions: Dividend Resolutions, etc

In addition, annual resolutions often include resolutions that declare capital dividends from the non-taxable portion of a corporation’s capital dividend account (CDA), declare eligible dividends extracted from a corporation’s General Rate Income Pool (GRIP), or declare non-eligible dividends drawn from the corporation’s Low Rate Income Pool (LRIP). Resolutions can also declare management bonuses, share redemptions (taxed as deemed dividends) or other forms of year-end resolutions in order to extract retained earnings from the corporation in the most tax efficient manner.