I am a business lawyer. Some readers may be more familiar with the term corporate or commercial lawyer. A term less common in Canada is solicitor. Look in the dictionary (Webster’s Ninth New Collegiate Dictionary) and one of the definitions of solicitor is a lawyer who advises clients. Another definition of a solicitor is a lawyer who restricts his or her practice to giving legal advice and preparing formal documents. Historically the word solicitor meant one who conducts legal matters on behalf of another.
This is the role of a business lawyer.
As a business lawyer I provide many professional services for my business and corporate clients. These include mergers, acquisitions, amalgamations, commercial transactions, internal reorganizations, interpreting contracts, drafting contracts and the list goes on. You may have a small one or two person company and ask what does this have to do with me? I also provide assistance for more everyday legal tasks such as notarizing documents, keeping your company in good standing by filing annual returns and reviewing and signing financing and security documents when your company borrows money from a bank or other financial institution. Often times among the documents your bank will ask you to sign are personal guarantees which require the shareholders and directors of your company to personally guarantee your company’s loan.
Clients often ask me to help them organize their company documents when they have incorporated their own company. These are clients who have gone to a licensing center and bought an incorporation package. I often meet with these clients who have done this task themselves without the benefit of hiring a lawyer and their company Minute Book generally doesn’t contain all the documents their company is required to keep and very often some of the documents are not filled out correctly and are not properly signed.
How important is this? It is very important!
The purpose of your Minute Book it to keep all of your important company records in one spot These are the records that show what your company may do and what your company has done in the past. If you are thinking that since it is your company and you know what it has done, that is good enough, I want to let you know it isn’t good enough and why.
Here is an example:
All companies carrying on business in Alberta are governed by legislation. Most companies carrying on business in Alberta are governed by the Alberta Business Corporations Act (BCA).
The BCA requires, among other things, that your company hold an annual shareholders meeting and an annual directors meeting. The BCA requires you to keep a record of these meetings showing your company has dealt with the matters the BCA requires your shareholders and directors deal with at these annual meetings and keep a record of these meetings. The BCA requires your company to keep these records in your company Minute Book.
Many third parties require a written legal opinion about the status of your company before they will do business with, sign contracts with, lend money to or invest in your company. They will ask your lawyer to provide a written legal opinion after a review of your company Minute Book stating whether your company is in good standing under the BCA. This means they will want to know your company is properly registered as a company, all of your company’s annual returns are filed properly, your company Minute Book is up to date and properly records everything required to be recorded and your company has the legal ability to enter into the agreement or transaction you have planned.
You will need a proper written record in your company Minute Book for your lawyer to provide this written legal opinion in order to proceed with the transaction you have planned for your company.
I frequently provide written legal opinions for companies borrowing money. The bank asks for a written legal opinion from the company lawyer as part of their security requirements for the loan. The bank wants to know in writing that I confirm your company is in good standing as it is a currently registered company, has the legal capacity to enter into the loan and security agreements with the bank and your company can carry out the obligations created in the loan and security agreements. I am required to review your company Minute Book and all of the records in it in order to provide this legal opinion about your company to your bank. If you don’t have a company Minute Book or you haven’t kept it up to date with all of the required filings then I can’t provide the legal opinion your bank requires.
Keeping your company records up to date seems like it should be simple enough and at the same time I often assist clients who sell a great product or service, are skilled at what they do and are challenged in keeping their required company records up to date. This is one of the many professional services I, and other business lawyers, provide. If you have a business, my best advice is: make sure you have skilled professionals working for you – a good business lawyer and a good business accountant.