The Ontario Companies are now governed by the 1982 Business Corporations Act.
Under The Business Corporations Act, a corporation is required to hold a meeting of the shareholders annually not later that fifteen months after the holding of the preceding annual meeting.
The holding of the annual general meeting of the shareholders is not related to the commercial or business activity of the corporation. So long as the Company remains in existence, the meeting must be held, even if the Company is not doing any business. If the company is not doing any business, steps must be taken to wind up the company. If your company is inactive, please advise.
Unless a waiver of notice has been signed by the shareholders, they must be given at least 10 day’s notice of the time and place of the meeting. The notice must be sent to the shareholders at the address indicated on the shareholders' register.
At the shareholders meeting, the financial statement of the corporation must be presented and adopted by the shareholders. The financial statement must be prepared by an auditor and signed by two directors before presentation to the shareholders.
For most small companies, it is possible to dispense with the requirements of the auditor. In such cases, a consent of the shareholders indicating that they wish to dispense with the auditor and the presentation of the financial statement which should be signed by all the shareholders. If this consent is to be prepared, we should receive instructions to that effect from you.
Unless you otherwise instruct, I will be indicating the name of the accountant in the resolution and not the auditor.
The shareholders by a majority vote, determine who the directors will be and this is also done at the shareholders meeting.
If the meetings are not held annually, this may be considered by the Tax Department to be absence of "corporate acts" and the existence of the corporation may be ignored for tax purposes.
The lawyer is not required to be present in your annual meeting, unless you are anticipating any problems. The lawyer's function is to complete the usual record in a legal form, as required by The Business Corporations Act. This may look like a routine formality, but it is an important formality. If these records are not kept up to date, problems may arise at a later date.
I have a monthly index system pursuant to which I will bring up to date and remind you in the same month, every year, of the annual minutes. You should let me know the date on which this record is to be completed, and if you are with your business partner or members of the family who are shareholders, you will not require to call a special meeting.
I will, once a year, review your corporate records, and with my report on the preparation of the annual minutes and give you a summary of relevant information as recorded in the Minute Book. This will keep your own records up to date and prevent difficulties arising in the future from the lack of proper record keeping. The usual things missed out are the absence of the shareholders' agreements, the absence of wills, the lack of signing of the annual minutes, or other resolutions, or failure to inform your lawyer of the change of directors, addresses, or change of head office address. There are penalty provisions if the notices are not properly given to the Ministry of Consumer and Commercial Relations, of certain changes. Should any of these changes occur, you should let me know immediately, so that I can complete the proper formalities for you.
The directors in a corporation are personal liable under various statutes to ensure that certain formalities are properly complied within the running and legal organization of the corporation. If you would like me to provide you with a memorandum on such liabilities of the directors, I will be glad to do so for a nominal fee.
One Shareholder Company
Requirements of electing a director, appointing the auditor, etc. apply also to a company with only one shareholder. In such case, records of the annual meeting can also be prepared by resolutions without a meeting of The Business Corporations Act.
Who Should Prepare Them
The preparation of the annual minutes and the organization of the minutes is a legal function and it should be done by a lawyer, and not an accountant.
The usual cost of preparing the minutes is CAD$.250.00 per annum plus GST. Where we have done other things in the company or where the company minutes require more than usual services the fees will be more.
Please review the *Disclaimer below. The memorandum is prepared as assistance and guidance to you ONLY and to minimize the time spent in discussion. Any specific questions regarding your matter should be referred to Mr. Chauhan.