All corporations are required to keep detailed corporate records. These records are kept in what’s called a corporate minute book, or corporate records book.
Why are Minute Books Needed?
Maintaining corporate records in a minute book is important for several reasons.
First, it ensures that rules governing the corporation can be accessed as and when they’re needed. If you need to see if there are restrictions on what a corporation can do or how it makes decisions, check the minute book.
Second, it ensures that there is a clear record of who the shareholders or owners of the corporation are at any time. Without a central place for keeping such records, it would be difficult to determine how many shares a person owns, or what they’re worth.
Finally, it provides a paper trail for corporate decision making. Want to know who approved a certain corporate decision and when? Check the corporate minute book.
The Old Way (Slow and Inconvenient)
Until recently, the only viable option for storing corporate information was to keep records in paper form.
Although it’s been possible to scan documents and store them electronically since the late 1980s, it was cumbersome to do so and provided very few benefits over physical record storage.
Until around 2010, if you wanted to maintain an electronic version of a minute book, you would still need to mail out documents for a physical signature.
Once the documents were signed and returned, you would then need to scan the signed documents and place them in a digital folder.
If digital records were used at all, they were often just an electronic copy of a physical binder that was also maintained.
This meant more work very little gains in terms of client convenience.
If you wanted to share access to the electronic records, you could either burn a CD-ROM and send it by mail, or print and mail the documents out to a client.
You could also send records via e-mail, but this poses security risks, and until recently, most e-mail servers didn’t easily allow for transferring large scanned document files.
The New Way (Fast, Efficient and Convenient)
It wasn’t until the emergence of cloud computing and electronic signatures, that storing these records in physical form became far inferior to maintaining corporate records in digital form.
With cloud file storage, it became possible to share digital documents easily and securely with clients, for next to nothing and with very little time or effort required. Clients could access a link and view shared documents within seconds.
With electronic signatures, it became possible to draft, sign and file documents, without printing a single piece of paper.
In other words, the problems with using digital records were effectively solved.
Why Haven’t Most Lawyers Switched?
So why are most corporate lawyers still using less efficient, inconvenient physical corporate minute books for their clients?
Our guess is that they’re simply not willing to make the effort. Although switching to digital corporate minute books can make things much easier and convenient for clients, the benefit to lawyers is less immediate and apparent.
In order for lawyers to make the change, they need to take several steps.
First, they need to figure out a good way to store the electronic documents and maintain audit trails. This can be confusing, complicated and risky for those that aren’t tech-savvy.
Second, they need to find appropriate cloud storage and electronic signature service providers. For lawyers (especially the older ones in decision making roles) this can be difficult and time-consuming.
Finally, they need to make the decision to put in the time, effort and resources into to making the change. They’ll need to purchase software subscriptions, train staff, update security protocols, etc.
Most lawyers couldn’t be bothered. They would prefer just to keep doing things the way they’ve always been done.
Our Approach to Corporate Records
When we started All In Business Law, we decided to take a different approach than most other business and corporate lawyers. We decided to embrace change whenever doing so would or could provide added value, convenience or cost savings to our clients. Even if it meant sacrificing our spare time and billable hours.
That’s why moving to digital corporate minute books was a no-brainer. It’s taken a lot of time, money and work to convert all of our clients to digital minute books, but we’ve made the switch and couldn’t be happier.
The change has added convenience and potential cost savings for our clients (no more postage and shipping costs, storage fees, etc.). It has also unlocked potential uses for the data contained in the minute books that would not be available had we chosen to take the easy route and accept the status quo.
Although scanned corporate records are great and provide convenience for our clients, it’s just the first step we’re taking toward the digitization of corporate records.
Our next step is to go beyond scanned documents by taking the information within those documents and recording it in digital form that can be sorted, searched, filtered and altered with ease.
This will allow us to be more responsive to the needs of our clients by using the data to identify and address potential issues. It will also make it easier for clients to access and update their corporate records and for us to prepare documents based on that up to date information.
Check out this page for more information about why we’ve switched to digital corporate minute books, and how it benefits our corporate clients.
We look forward to sharing with you more as additional improvements are made and we are able to utilize the untapped potential of corporate data for the benefit of our clients.
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