01 A Primer on Entity Management
💪 The MinuteBox User Manual
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What is Entity Management?
Before jumping into entity management itself, it is helpful to provide an overview of minute books, corporate records, and entities. Some of the following is historical but provides a solid overview of both the problems MinuteBox solves and our modern approach to entity management.
What are Minute Books?
A corporate minute book is a collection of simple, but necessary organizational records and documents for incorporated companies, partnerships, trusts etc. Much like a patient’s health history or a high-school student’s permanent record, a minute book contains information about the status of the corporation, its shareholders, directors and corporate board minutes, as well as other company specific information.
Minute Book Documents & Data
Minute book contents can be divided into two separate but equally important components: documents and data. The first component is obvious. The documents, or pages, contain snapshots of the minute book at points in time. But the second component, often overlooked, is the data, the underlying information associated with the documents. All the information you may ever want to know about a corporation need not be represented in a traditional binder way. Combining documents with data can help minimize many of the inefficiencies often associated with minute book work.
Minute Books Access
Corporate law requires minute books to be kept up to date, regardless of whether the company is public or privately held. Shareholders (the owners of corporations), by law, need to be informed and updated about major changes or decisions that affect the corporation. Shareholders have the right to request to see the minute book and, as a result, the information needs to be correct.
Aside from shareholders requesting the information and the need to update the book’s contents each year, there are three reasons why someone may request to see a corporate minute book:
The company is being acquired. An acquiring company will always request to see the minute book of the target company. The reason is that the acquirer needs to be certain that the company being purchased is actually owned by the shareholders. The minute book gives a snapshot of the status of the company, the true ownership structure and the individuals authorized to act on its behalf.
The company needs financing. Whether money is coming from a bank by means of a loan or external private investment, investors want to be sure that whomever is receiving the capital is the proper owner.
Tax audit. The government can request to see the corporate minute book of any organization. One concern for the government are the taxes resulting from the payment of dividends, which are taxed differently than income. Unless resolutions are passed (and stored in the minute book) by the company, the government may question the legitimacy of the tax filing.
For generations, minute books were collections of papers, stored in binders and often stored on the shelves of either the corporate secretary, or more popularly, in the office of the company’s lawyers. But as the numbers of incorporations increased over time, so too did the number of minute books. Law firms of all sizes were (and remain) inundated with walls, rooms and basements filled with corporate minute book binders. Some are well organized, others are unkempt. But regardless of their age or how they are stored, they remain valid and binding in the eyes of the law.
A Brief History of Entity Management
Several decades ago, new software systems emerged, allowing users (mostly clerks or paralegals) to enter and store data from minute book documents onto the computer systems. Legacy software was little more than a glorified spreadsheet, but it nevertheless represented a shift in minute book maintenance. This, coupled with an increase in the prevalence of scanning/digitization solutions, means that minute books could now be stored and maintained virtually.
For several decades, older software for storage purposes was sufficient. But much like all software, technology has advanced to become cloud-based, accessible and automatic; so too have digital minute book solutions.
We are now in an age where lawyers, law clerks/paralegals and even clients are demanding instant access to the minute book records, seamless entry of data, smart systems that can suggest contents and document automation tools capable of generating new documents without the need for coding or computer engineering knowledge. This is the next step in minute book storage and maintenance.
Minute books need not be a source of frustration for legal teams. With the right solutions, the storage and maintenance of corporate records can be a source of consistent revenue for law firms.
Minute Books, Record Books, Company Records
Minute books are also referred to as “Record Books” in other jurisdictions (mainly the U.S.). For the purposes of MinuteBox, we do not distinguish the terms “Minute Books”, “Record Books”, "Corporate Records", etc.
Instead, we simply use the word Entity.
MinuteBox is a modern,
As a modern entity management platform, MinuteBox is broken down into three main elements:
- Storage. Access, upload, view, edit and securely share minute books in the cloud from anywhere.
- Database. A robust, modern and flexible database that can be accessed throughout the entire platform.
- Maintenance. Generate documents, forms and precedents without installing software, learning how to code or ever leaving MinuteBox.