Insights and updates
from MinuteBox

The Canada Business Corporations Act (CBCA) was first introduced in 1975 to replace the previous legislation entitled the Canada Corporations Act. The primary purpose of the CBCA was to:

• Revise and reform the law applicable to business corporations incorporated to carry on business throughout Canada
• Provide uniformity to business law across Canada
• Allow federal corporations incorporated under the CCA to continue under the CBCA

Some of the ways the CBCA reformed how business is conducted in Canada had to do with the transfer and issuance of shares, as well as updated shareholder rights. The new laws are important for businesses to understand should they plan to incorporate in the near future.

How the CBCA specifies the transfer and issuance of shares

Under the CBCA mandate, all corporations that issue shares to shareholders must maintain a securities register to remain in compliance with federal law. A securities register, also known as a shareholder register, lists all the issuances of a corporation’s shares to its registered shareholders. The register contains personal information about the shareholders; additionally, it lists the number of shares held by each shareholder, and the date that shares were issued or transferred to the various shareholders.

The corporation is the issuer of shares. In most jurisdictions across Canada, the issuance of shares verifies shareholder rights and interest in the corporation’s rights or property. Corporations headquartered in Quebec follow a similar mandate by issuing shares that confer rights to the corporation’s property.

Shareholder rights under CBCA provisions

The CBCA also outlines specific shareholder rights that must be upheld by all corporations within Canada. One of the most important provisions within the CBCA is the protection of minority shareholders’ rights. Regardless of whether shareholders hold majority or minority ownership of the corporation, the CBCA states that all shareholder rights must be protected and respected. There are significant and far-reaching financial penalties if those rights are violated.

Additionally, the CBCA states that:

• There is no mandatory requirement for a fixed number of shares
• The idea of “par value” shares is an abolished concept and a prohibited practice
• Recognition that shares can be classified under different share classes
• At least one share class in every corporation must always have unrestricted voting rights
• Shares may not be issued on partly-paid or a subscription basis

There are also laws for “bearers of shares.” Under the CCA, bearers of shares did not have the same rights as registered shareholders. The CBCA states that bearers of shares do have the same rights; however, the “bearer share” is not recognized by name. The bearer share will appear in the shareholder register simply as “bearer.”

Corporations also have authorization to issue fractional shares, and they have the right to issue maximum flexibility, particularly in the case of amalgamations, share exchanges and share splits. Board directors are entitled to fix record dates to determine the shareholders’ rights to receive dividends, receive notices of meetings, or participate in liquidation distributions.

How to protect shareholder rights with entity management technology

The CBCA demands that all corporations maintain up to date shareholder registers to comply with federal laws. Traditionally, corporations have kept records of all shareholders, issued shares, and share classes in a physically binded ledger.

However, think about how this approach looks for a company in the 2020s. Rather than an innovative and accessible solution to document shareholder information, a physical ledger is a handwritten document. It requires tedious amounts of time and energy spent to update new shareholder records, or to record transfers of shares from one shareholder to another.

Innovative corporations use entity management software, like MinuteBox, to create, amend, and verify information in a digital shareholder ledger. Instead of writing notes into a binder, corporate counsel can use entity management platforms to drag and drop new data into the ledger in just a matter of seconds. This is a far more time efficient way to keep track of all important shareholder information.

The best part about this approach is that platforms like MinuteBox are cloud-based solutions. This means that all shareholders can access the ledger from the convenience of their own homes or wherever they may be in the world that can connect to the internet. The system is protected with biometric and hardware key authentication parameters. This ensures only those with shareholder rights have access to the ledger, which is very important to protect shareholder privacy from the prying eyes of the public.

Talent management is arguably the most critical challenge for law firms today. That’s according to the results of a Thomson Reuters Institute report, which identified talent acquisition and retention as the top concerns facing the legal community.

The findings of the report suggest that the COVID-19 pandemic impacted how firms both attract and retain talent. Legal professionals are demanding more flexible working arrangements from their employers to retain their positions. Many of the top paid legal minds increasingly prefer firms that utilize innovative technologies to improve daily work habits.

Salaries aren’t the only talent acquisition tactic for firms

The Thomson Reuters report cites ever-increasing salaries as a prime reason talent acquisition and retention are so competitive in the legal community. Financial pressure placed on firms to retain top legal minds is being felt in all corners of the globe. However, financial compensation isn’t the only incentive for legal talent to accept employment by their chosen firms.

Modern technology has broken down geographic barriers that previously restricted legal professionals from accepting employment outside of their home communities. Technology enables firms to connect with the top legal experts, regardless of location. Practicing legal professionals appreciate the flexibility afforded by firms that utilize this technology.

Attorney burnout impacts talent retention rates

Attracting great talent is half the battle, but retaining your top performers is the other challenge. The Thomson Reuters report cites attorney burnout as one of the driving reasons why firms have higher attrition rates, and the authors of the report recommend implementing solutions that address ongoing issues for legal professionals.

According to the American Bar Association, nearly 60% of all practicing attorneys work over 40 hours per week, and over one in five work more than 50 hours per week. Additionally, 87% of surveyed professionals said their law offices allowed remote or hybrid work. The majority of respondents said remote work did not impact their productivity or the number of billable hours they could charge to clients.

What’s the takeaway here? The data from the ABA study demonstrates that legal professionals are willing and able to put in the hours. The insights from the Thomson Reuters report suggest there are better ways for legal minds to utilize their talents more effectively. Firms would be wise to implement solutions that improve productivity to avoid the risk of burnout and attrition.

Entity management software helps increase time for billable hours

One way to reduce attorney burnout is to provide the resources that allow legal talent to devote more time towards servicing their clients. By providing the means to reduce time and labour attorneys must devote to minute book management, they receive more time and resources to increase billable hours. This is a great tactic to improve talent retention and help your firm work towards the larger objective of increasing Legal Recurring Revenue.

Entity management software is the best resource to modernize minute book management with more efficient workflows. Instead of sorting through binders upon binders of client minute books, professionals can upload all client records into cloud-based platforms.

Once the records are in the platform, they’re automatically organized into documents that resemble standard PDF files. This makes reviews and approvals of minute book records far more streamlined and efficient. If clients have questions about a particular document in their records, you can use entity management software’s advanced search capabilities to find the document in question in a matter of seconds.

Using modern entity management solutions, review processes that once took hours or days of clerical work are completed almost instantaneously. Legal professionals can use these solutions to improve their own productivity, reduce manual clerical work, and dedicate more time towards improving client relationships.

Showcase your modern workforce and attract the best talent

When you adapt your minute book management process to more modern workflows, your firm demonstrates a commitment to innovation. Positioning your firm as an innovative leader is very attractive to legal professionals, and an innovative approach to minute book management can improve your firm’s talent acquisition strategy.

Cloud-based entity management software allows legal talent to work with flexible solutions that improve their productivity. Fewer working hours are necessary for minute book management, which allows lawyers to feel more fulfilled and satisfied with how they spend their days.

The platforms are also beneficial to clients, allowing your legal team to respond to client inquiries with speed and proficiency. When clients feel that their attorneys have their best interests at heart, they’re far more likely to retain your firm for future services. Ultimately, modern approaches to minute book management help attract and retain your most talented legal minds, and they’ll support your efforts to boost Legal Recurring Revenue for the firm.

A subsidiary governance framework enables multinational corporations to manage their various legal entities prudently and responsibly. Implementing a strong subsidiary management framework can help prevent costly financial and reputational damage to the corporation’s brand identity as well as damage to their good standing in the marketplace.

Corporate entities are often complex and structured in very difficult ways that magnify the burden of compliance with federal regulations. Often, the corporate counsel departments that manage the legal aspects of these various entities are resource-lite and tasked with other responsibilities to the corporation.

Corporate counsel feel the pressure of their responsibilities

According to the 2022 In-House Counsel Compensation & Career Survey, which was conducted by The Counsel Network and the CCCA, over 50% of surveyed corporate counselors have responsibilities that go above and beyond maintaining corporate compliance.

A corporate counselor’s primary mandate is to provide legal services to individual employees of a corporation as well as legal counsel to protect the interests of the company as a whole. As part of their mandate, a corporate counselor’s day to day duties can include any of the following:

• Thorough legal research
• Contract evaluations and analyses
• Property law assessments
• Collective bargaining agreements
• Negotiations with government regulators
• Patent filing

Additionally, corporate counselor services may be required to:

• Consult with accountants or auditors to review corporate tax filings
• Prepare and review company documents for mergers and acquisitions
• Draft contracts for the leasing of equipment for the corporation
• Sit in on corporate meetings to discuss official governance policies

Majority of in-house counselors burdened by stress

Another study was conducted by the Canadian Corporate Counsel Association and Mondaq. They surveyed over 460 in-house legal professionals across Canada. According to the findings, 61% of chief legal officers and general counsel experience higher levels of stress and anxiety. This is largely due to the onus on their shoulders for the entity’s corporate compliance.

The numbers are even more concerning in publicly listed companies. The study found that 75% of general counsel representing public firms admit to recurring experiences of stress.

Help your corporate counsel reduce their stress by simplifying their workloads. Ensure your legal department has the resources to conduct proper entity management. If you’re being represented by outside counsel, request a meeting if there are gaps in the deliverables. Make an honest effort to better understand the situation. Perhaps resources were stretched very thin, a clerical oversight was made, or another unexpected reason. Don’t rush to make a bad judgment call without knowing all the facts.

Ensuring your corporate counsel is de-stressed isn’t just the moral thing to do; it also makes great business sense. Legal resources ensure quality and consistency in the entity management workflow. These are the necessary ingredients for accurate minute book records, vital documents should an audit be conducted on your business.

Tips to help corporate counsel simplify their workloads

Mindfulness, focus, and avoiding distractions are all ubiquitous best practices to help people in all professions improve their productivity. Corporate counsel benefit from these same approaches, but here are some specific ways to improve productivity in the legal department.

Improve time management skills

The high-stress environment of subsidiary management and corporate counsel requires legal professionals to operate with a high performance mindset. Time management is a vital skill to fulfill the needs of the corporate entity and avoid succumbing to the anxiety of all that work.

A time efficient subsidiary management solution automatically tracks all important dates related to contract negotiations or expirations and helps in-house counsel prioritize their tasks. They can adopt a work-back approach in their schedules, using those dates as the markers on the calendar. Tasks can be assigned in order of priority based on their relevance to the overall deliverables that must be implemented by those end dates.

Transparent communication with clients and colleagues

Upfront communication with clients and colleagues means the process is always moving forward. Any approvals or signatures to move a task along in the production pipeline are easily acquired by keeping all parties in the loop.

With a subsidiary management platform, all communications regarding corporate records are simple and straightforward. Prompts for signatures or reviews of corporate records are sent to the appropriate recipients, and, provided they have authorized access to the account, they can review those records at their own convenience. This saves your in-house counsel the time and stress of chasing people down to get important answers.

Modern minute book recordkeeping organizes all corporate documents

Finally, adopting a more modern approach to minute book recordkeeping eliminates most of the timely and stressful tasks of clerical work. As a corporate counselor, imagine the feeling of stress lifted off your shoulders knowing that there’s no risk any of your corporate entity’s official records will be lost or misplaced. Modern technology makes that hypothetical feeling a reality.

Using subsidiary management clouds, you can upload all corporate minute books into a secure platform that’s backed by biometric and hardware key authentication. Only the corporate officers and directors granted access to the account can view the records, ensuring all information remains as secure as it is convenient to access. There are also built-in integrations with e-signature solutions, allowing your legal team to gain required signatory approvals in minutes instead of days or weeks.
Help make your corporate counselors’ lives easier and more fulfilling. Join the MinuteBox revolution so your legal team can fall in love with subsidiary management all over again.

Companies that make corporate governance an integral part of their risk management strategy are positioned for compliance. Corporate compliance means any audits of internal controls, organizational governance, and subsidiary management procedures are smoothly executed. It’s governance policies that are one of the principal non-financial factors to set corporations up for strong fiscal performance.

It seems like a no-brainer; however, far too many companies fail to take the risks of poor subsidiary management seriously. They’re not small fish in the pond either. Companies like Eron, Cadbury, Xerox, Wal-Mart, and other Fortune 500 brands have faced significant costs resulting from poor corporate governance.

How corporate governance improves financial performance

In a two year study involving publicly traded companies on the S&P 500 Index, corporations with strong governance policies outperformed the weakest firms by 15%. The study also determined companies that faced governance crises underperformed in their sectors by as much as 35%, on average, a year after their compliance crisis. This resulted in a loss of shareholder value exceeding $490 billion.

Despite the costs of poor corporate governance, it remains an ongoing challenge for many firms. Poor corporate governance structures result in bad decision-making, lack of accountability and transparency, and a direct loss of financial returns.

Common red flag warnings of poor corporate governance

What are some of the warning signs that indicate a corporation is falling into a governance crisis? Fiscal mismanagement is one of the biggest red flags in any governance audit. Businesses can look no further than the financial scandal that tanked FTX as a case study of how not to manage corporate funds.

Additionally, an inept leadership team and board of directors cause expensive corporate governance problems. Companies that promote based on nepotism or “yes-man” cultures can ignore disciplined expert advice on business strategy, organizational hierarchy, or financial incentives, resulting in costly mistakes for the business.

How to avoid falling into corporate governance pitfalls

Effective leadership makes all the difference between companies that fall into the group of top-performing S&P firms and the ones that find themselves at the bottom. Leaders that set the tone right from the top create corporate cultures built upon shared values and behaviors. Executives that adhere to those values will make responsible decisions with the entities that, in turn, create more profitable long-term results for the corporation.

By avoiding things like nepotism and unmerited promotions to leadership positions, corporations can build a leadership culture that makes the best strategic decisions for their business entities. Adopting a business regimen that demands accountability and transparency with all corporate records ensures receipts for all business decisions are documented. In the event of a corporate audit, the company can comply with the regulators and maintain a responsible brand reputation.

Use subsidiary management software for accountability

So what’s the best approach to maintaining compliance with responsible corporate governance? As it turns out, technology can help corporations of all sizes maintain rigid, accurate, and transparent records to support good and responsible governance.

Subsidiary management technology uses cloud-based solutions to help companies digitize all corporate records in one centralized platform. The platform includes advanced search parameters that allow in-house counsel to find, sort, and report on any records of notice for executive review or approval, as well as any audit requests from outside regulators. Plus, since the platform is cloud-based, any leaders that require access to the records can view them from the convenience of any location in the world.

Subsidiary management platforms also allow your counsel to quickly generate reports that summarize things like capital purchases, mergers and acquisitions, or the transfer of shareholder equity amongst investors. All legal dates and expiries can also be tracked within the platform, which is very important if any licensing deals require renewals or renegotiations.
In the end, responsible corporate governance is one of the defining factors that separate successful companies from mediocre ones. Using subsidiary management technology, which you can learn more about with educational discussions, you can help your own company remain compliant with good corporate governance, and set your business up for success in the future.

Legal professionals are required to maintain diligent minute book records to remain compliant with federal and provincial laws across Canada. Minute books are how corporations remain accountable and transparent to their executives, their shareholders, and even different levels of government. Minute books summarize important details about a corporation, including:

• Articles of incorporation
• Constating corporate documents
• Corporate by-laws
• Official resolutions
• Shareholder ledgers
• Director ledgers
• Shareholder agreements
• Notices of consent

The process of maintaining minute book records is known as entity or subsidiary management. While these two functions are synonymous in many ways, there are distinct differences between the two approaches. How do they differ from each other? Let’s dive into that!

Minute book records allow corporations to remain compliant

Minute book records are required for corporations to remain in compliance with the laws stated by the Canada Business Corporations Act. All corporations are required to accurately report any changes to the corporation’s finances, operations, and shareholder agreements. This is primarily to ensure that the corporation operates fully above board and can provide accurate records of all financial transactions to the Canada Revenue Agency should an audit be required.

In addition to legal compliance, it makes good practical and business sense for corporations to maintain accurate minute book records. In the event that there are disputes about executive decisions or discrepancies between shareholder equity, up-to-date minute books allow the disagreements to be resolved accordingly. Ultimately, all corporations have responsibilities to their owners, to the government, and to any other stakeholders invested in the business.

The best way to think about minute books is to view them as a snapshot of a corporation’s value at a fixed period of time. Minute books allow corporations to maintain accurate records of past decisions, so that the focus of future executive or shareholder meetings remains on how to scale future growth for the corporation.

How your corporation documents minute book records

The process to create and manage minute book records depends on one key variable. Are you a legal professional hired by a corporation to manage their legal affairs, or are you part of an in-house corporate counsel that oversees all compliance matters? Depending on your role, you’ll undertake either an entity management or subsidiary management process to maintain accurate and transparent minute book documents.

What is entity management?

Entity management refers to the process of managing legal entities like corporations, trusts, partnerships, and other legal entities. The purpose of entity management is to ensure legal entities, such as corporations, live up to the various responsibilities and obligations to the various stakeholders invested in those entities.

The entity management process is chiefly undertaken by legal professionals who are either independent professionals or members of a law firm. In either case, these legal minds have been hired by a corporation to manage their minute books and corporate documents to remain compliant with Canadian jurisdictions.

What is subsidiary management?

Subsidiary management is a subset of entity management, which involves the corporate governance management of a corporation and their related subsidiary entities. Similar to the broader entity management process, the purpose of subsidiary management is to ensure all responsibilities and obligations are upheld by the corporate entity.

The distinction that separates subsidiary management from the broader entity management lies in who is responsible for the recordkeeping. Subsidiary managers are in-house corporate counsel who manage the same directors and share capital across many entities. This could involve as many as tens to hundreds of related parties.

How to use entity or subsidiary management software to manage minute book records

Whether you’re part of a law firm or part of an in-house corporate counsel, minute book management is an essential part of your role to support the corporation. Having the right tools to make this process seamless enables your own legal team to manage time and resources in a prudent and efficient manner.

That’s why entity/subsidiary management software is such a valuable asset to legal professionals. These solutions modernize the entire minute book record keeping process. You can eliminate physical binders of minute book records from your day to day routine by transferring all minute book files into digitized records that live securely within the cloud.

Cloud-based solutions are backed by biometric and hardware key authentication parameters, ensuring only people with approved credentials can access the files in the platform. If there are disputes between shareholders, the matter can be resolved in a matter of minutes by using advanced search capabilities to immediately pull up the file in question.
Entity/subsidiary management makes great business sense for legal professionals. These platforms make legal representatives more efficient, which helps reduce administrative costs. Additionally, clients are far more satisfied with your legal services, since you can provide answers to their pressing questions instantaneously. Finally, you can even give your legal team a leg up when attracting new talent by positioning your entity as an innovative leader in entity/subsidiary management!

Keeping your corporate digital minute book up to date ensures your clients have immediate access to all of their official records. Providing clients with up to date records in an easy and convenient manner goes a long way towards boosting client satisfaction. Highly satisfied clients are more likely to stick with your firm for longer periods of time, improving client retention rates and helping further grow your own firm’s business.

The fastest and easiest way to provide those clear answers to your clients is through the use of entity management software. These types of platforms are trusted by legal professionals for a reason. They allow you to centralize all of your minute books in one convenient location, speeding up the time it takes to find important records for your clients.

Even better is the fact that these platforms have built-in advanced search capabilities to uncover a specific file within minutes. This makes organizing and retrieving minute book records and corporate information much easier compared to combing through stacks of paper documents.

How to organize minute books with cloud-based software

If you choose entity management software to organize your minute books, the next logical question to ask yourself is this: how do you actually organize minute books within the platform? While there are some details that will be unique to your firm’s situation, you can use this overview to establish the basics.

How to Manage Minute Books for Corporate Law?

See Use Case

Start with the sections and tabs

Organization is only possible if you decide how to categorize all of your records within the platform. To do that, it all begins with the sections and tabs you create within the platform hierarchy. You can select a variety of styles and names for tabs in a minute book. Define how those styles and names best reflect the way your firm operates, and how you will provide service to your clients.

Decide how to segment files by record type

There are a number of different file types that you can store within your minute book. You could create categories in the form of:

• Corporate ledgers & registers
• Company ownership charts
• Shareholder cap tables
• Capital transactions between shareholders
• Etc.

Identify the categories that best describe the record types maintained by your firm on behalf of your clients. By creating categories for each of these record types, it makes tagging, filing, and searching for those records much easier after the information is uploaded into the platform.

Scan and upload all minute book records into the account

Now that you’ve created the sections and record types you’ll use as the framework to organize a corporate digital minute book, you’re ready to upload the records themselves into the platform.

The uploading process is actually very straightforward if you use MinuteBox as your entity management solution. Simply coordinate with our team of scanning professionals and arrange a time to have those professionals come by your office. All scanning is completed on-site and no records ever leave the four corners of your office. This is part of our guarantee that all data is secure and fully protected from the moment our professionals begin the transformation process.

Once on-site, our enterprise grade scanners do all of the work. We’ll transition your record book collection to the cloud efficiently, securely and with the highest quality standards for security. We also throw in our commitment to maintain the highest quality of integrity!

Fast and easy adoption of the solution

Once the upload process is complete, you’re ready to start using and managing your account. You can invite clients to access their corporate records from the cloud, guaranteeing that each client can find and leverage all records pertinent to their immediate needs. Migrating all minute book records into MinuteBox will also modernize your entire workflow. You’ll also help your legal and paralegal professionals earn back valuable time without having to comb through individual paper records for answers to client questions. The speed and ease with which your team can uncover this information is exactly how to improve client satisfaction, ultimately contributing much higher Legal Recurring Revenue for your firm.