As we have mentioned in previous articles, and maintained on our platform, Tobuso, corporate records are rapidly moving from paper to digital format. With all of these changes, it’s understandable that you may be wondering what the law states about non-paper (or digital) corporate records—which we will talk about in this article.
What is required of corporate records?
It is crucial to note that the law requires businesses of any size to keep corporate records that are accurate and up-to-date. No matter which way you may store your corporate records, you must ensure that they are kept clean.
Below is section 140 of the Business Corporations Act (Ontario), which provides an overview of the records that need to be prepared and maintained:
“Records, duties of corporation
140 (1) A corporation shall prepare and maintain, at its registered office or at such other place in Ontario designated by the directors,
- the articles and the by-laws and all amendments thereto, and a copy of any unanimous shareholder agreement known to the directors;
- minutes of meetings and resolutions of shareholders;
- a register of directors in which are set out the names and residence addresses, while directors, including the street and number, if any, and an e-mail address if one is provided, of all persons who are or have been directors of the corporation with the several dates on which each became or ceased to be a director;
- a securities register complying with section 141;
- a register of ownership interests in land complying with section 140.1; and
- a register of individuals with significant control over the corporation complying with section 140.2. R.S.O. 1990, c. B.16, s. 140 (1); 2015, c. 38, Sched. 7, s. 44 (2); 2019, c. 7, Sched. 6, s. 1; 2021, c. 40, Sched. 2, s. 2.
Idem
(2) In addition to the records described in subsection (1), a corporation shall prepare and maintain,
- adequate accounting records; and
- records containing minutes of meetings and resolutions of the directors and any committee thereof,
but, provided the retention requirements of any taxing authority of Ontario, the government of Canada or any other jurisdiction to which the corporation is subject have been satisfied, the accounting records mentioned in clause (a) need only be retained by the corporation for six years from the end of the last fiscal period to which they relate. R.S.O. 1990, c. B.16, s. 140 (2).”
The above records can be stored digitally so long as they can be opened up and viewed during business hours at the registered head office of the corporation. This is possible through Tobuso, as you can log on from any device to access your records when necessary.
Is paper necessary?
In Ontario, there is no law that states that corporate records must be maintained on paper. Sections 139 (1) of the Business Corporations Act (Ontario) states: “Where this Act requires a record to be kept by a corporation, it may be kept in a bound or looseleaf book or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device. R.S.O. 1990, c. B.16, s. 139 (1).”
The government of Ontario has updated their system so that all filings can be done online. The launch of the New Ontario Business Registry shows their own efforts to switch to digital. In fact, since all of these filings are now done electronically, it is more effort to print these documents and add them to a paper minute book than it is to save them in digital format… in our humble opinion.
What steps should I take before switching to digital record keeping?
If you have an Ontario corporation and are wanting to switch to digital for your corporate record keeping, you may first want to consider a couple of things:
- Confirm that the By-Laws, Articles, or any Shareholders Agreement do not restrict you in any way from switching your Corporation’s records to digital format.
- Confirm that all of the shareholders are in agreement of this decision. It would be good practice to pass a resolution signed by all of the shareholders, confirming the decision to switch to digital format. If you are the sole shareholder, or if there are just a few of you that work closely together (perhaps you are also the directors), then this should be easy to obtain.
All of this to say, when you’re ready to make the change, you can transfer your corporate records from paper to digital format easily—especially by using a platform like Tobuso.
How Tobuso makes it easy
Tobuso acts as a central hub that holds all of your corporate records. You can keep everything accurate and up-to-date within this platform. The Minute Book can be shared amongst all of the directors and anyone else who may need access (such as lawyers and accountants). This way, if ever one director adds something to the Minute Book, anyone who has access to it still has the updated version with the newly added document. This method is much more reliable than just saving a Minute Book on a computer and sharing it as a zipped folder to others. That method can get confusing and messy, as there may be a Minute Book saved on one person’s computer that is more up to date than everyone else’s version saved on their computers.
Changing permission levels and removing or giving access is easy on the Tobuso platform. If a director resigns, or you switch accountants, you can simply remove their access to the records, and add new directors, accountants, etc. as needed. No more flipping through loose leaf pages or shipping minute books from one place to another—everything can be done easily in one central location.
For those that you want to give access to, but want to ensure that they can’t physically change anything within the Minute Book, you can just give them “Viewing Access”. This allows them to view and download records, but not make any modifications.
We hope this article gave you some clarity on digital record keeping in Ontario—and perhaps convinced you that it’s time to switch your records to digital. If you decide to switch your records to digital format, make sure to check out our platform! If you have questions about the Tobuso platform, you can contact us here.
