If you are planning to start a business in Canada, it will be very useful for you to know what is corporate record keeping and what is its function. This procedure is very important because it favors the productivity and good management of your new business, as well as it ensures compliance with the regulations to establish yourself in the Canadian business world. 

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After incorporating a business, as we discussed in the previous blog, the next crucial step is to keep corporate records organized and in compliance with the laws of the land. But why is corporate record keeping so important and how is it done? Read with me to the end and take note of each explanation - let's get started!

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What are corporate records?

Corporate records are legal and administrative documents that reflect the activities and decisions of a company. They include:

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• Minute books, consisting of records of directors' and stockholders' meetings.

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• Share registers, with details on the issuance, transfer and ownership of shares.

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• Articles of incorporation, which contemplate documents that establish the creation of the company.

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• Corporate resolutions. These are important decisions made by the directors or shareholders.

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• Financial records, including financial statements, invoices and tax returns.

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Why is corporate record keeping important?

Maintaining up-to-date corporate records is important because it demonstrates compliance with Canadian laws, facilitates audits and avoids penalties. In addition, this transparency builds confidence among investors and partners, and allows for informed decision making.

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Corporate record keeping provides accurate data to evaluate business performance, which is very important to know whether or not you are going in the right direction.

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How to keep corporate records in an orderly and legal manner?

Doing business in Canada requires order from the opening of the business to its consolidation in the environment. A practical way to keep your records is to establish a filing system. To do so:

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• Use physical or digital folders to help organize documents by category (minutes, actions, finances, etc.).

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• Ensure that the files are accessible but secure.

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• Update records regularly:

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• Record all meetings, resolutions and changes in company structure.

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• Keep financial and tax records up to date.

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• Use technology tools such as business management software or specific tools for corporate records to simplify the process.

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• Consult with experts! When in doubt about any step of your new company, work with Canadian lawyers, this will ensure compliance with federal and / or provincial regulations of the country, depending on the type of incorporation of your company.

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What happens if corporate records are not kept in order?

If corporate records are not kept in order, the company may incur in misconduct leading to fines, legal sanctions and even dissolution of the company. In addition, the lack of records makes it difficult to obtain financing or to sell the company, if applicable.

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Improper handling of corporate record keeping can result in costly errors, legal non-compliance and loss of important documents.

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Recommendations for immigrant entrepreneurs 

Starting a business in Canada as an immigrant is a great achievement, but it is necessary to know that the laws are handled according to the provisions of each province and these may ask for specific requirements for the maintenance of your company's corporate records.

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Learn about best practices for records management or train your staff and seek professional advice.

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Immiland Law Corporation can help you establish an efficient corporate record keeping system in compliance with Canadian law. On the website: https://www.immilandcanada.com/law/corporativo you can explore our corporate services and more.

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Do you need more information on how to start a business in Canada as an immigrant? If so, contact us and we will be happy to help you. 

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I hope this topic will be useful. Remember that corporate record keeping is not only a legal obligation, but a strategic tool for your business success. 

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Thank you very much for reading, see you in the next blog!

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With love,

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Immiland Law Professional Corporation