Corporate Kits: What They Are and How to Maintain One

27 Sep

A lot of paperwork is needed to form a new corporation, and it is essential to professionally and formally organize its documents.

But this task can seem tedious and overwhelming. Fortunately, with our corporate kits handling, you can efficiently keep track of your company’s records in a kit that includes a binder with the business name printed on the spine.

It is like a corporate record book that collates all your information in one place. Are you searching for ways to learn how to do corporate kit handling? In this post, you will learn what a corporate kit is and why you need one.

What Is a Corporate Kit?

A corporate kit is an organized binder that functions as a record book for a Limited Liability Company (LLC) or corporation. It stores a corporation’s documents such as:

  • Its articles
  • By-laws or operating agreements
  • Minutes
  • Resolutions
  • Stock certificates
  • Member certificates
  • Transfer ledger
  • Various forms and permits
  • Organizational dividers for company formation documents
  • Tax ID information

When a corporation is formed, its owners are often presented with the opportunity to purchase a corporate kit. It is initiated either by the company or an attorney assisting with preparing and filing your legal documents.

The corporate kit performs an essential role by providing a form of authenticity and identity to a company in the form of the corporate seal and corporate stock certificates.

Corporate kits are province-centric. For example, if you incorporate in Ontario, your corporate kit should only contain relevant information about Ontario companies.

Certain parties may request access to your corporate kit, such as:

  • Accountants
  • Financial institutions (for example, the company’s bank)
  • Potential buyers
  • Prospective investors

What Is the Purpose of a Corporate Kit?

The primary purposes of a corporate kit are:

  1. To provide careful attention to the business’s financial and operational records for all business owners.
  2. To keep a record for the corporation and limited liability companies with the sole owner to manage day-to-day business affairs.
  3. To help the owners raise capital through debt or equity offerings, sell or transfer the business, resolve disputes between owners, or submit to an audit by provincial or federal tax/regulatory authorities.

What Records Are Kept in a Corporate Kit?

As mentioned, you can utilize your corporate kit as a secure place to organize essential company documents, including:

1. Company Guidebook: The province-specific guidebook contains a variety of information about a new LLC or corporation.

2. LLC Operating Agreement: This agreement template helps business owners to interpret their LLC ownership, membership, management and daily company activities. It is considered the binding contract among the members of an LLC. Unanimous consent is required for any changes.

3. Corporate By-Laws: The board of directors will develop rules and responsibilities for the officers, shareholders, and directors to effectively organize the corporation’s internal management. The by-laws may specify:

  • Daily procedures
  • Company structure
  • The officers and company ownership
  • The location and time of the yearly shareholder meeting.

4. Meeting Minutes Book: A minutes book is required by all corporations. This is where all the notes from official company meetings are kept. Usually, they are recorded and completed by the corporate secretary. Apart from noting down the critical minutes, you can store the records via electronic medium.

5. Corporate Resolutions: These should be kept on file as they document all the company’s managerial decisions. For example, a bank resolution is required before opening a corporate bank account.

6. Membership or Stock Certificates: Your stock certificate will represent your shareholding ownership in a corporation or your ownership in an LLC. A board can properly issue shares electronically or by ledger entries.

7. Membership or Stock Transfer Ledger: The documents of the stock transfer ledger are employed to keep a proper record of all of the corporation’s stock transactions. It includes the relevant details anytime corporate shares are issued, sold, or otherwise transferred.

8. Corporate Seal: The corporate seal is used to emboss all essential documents that have been agreed upon by a corporation’s board of directors or the management team of an LLC. The provincial law acknowledges the signature of a company’s authoritative figure as holding the same power as a corporate seal. It may include positions such as director or CEO.

9. Company Formation Documents: Also known as the certificate of incorporation or the corporate charter, it is used as a formal document registering with a government body to legally document a corporation’s creation. It generally contains relevant information such as:

  • Company/firm’s name
  • Street address
  • Agent for service of process
  • Amount and type of stock to be used

In addition, for reference, you can incorporate other subsequent filing documents, including mergers, amendments, change of agent filings and tax ID assignment letters. Your lawyer can keep the original minute book materials. The habit of corporate kit handling and keeping the records up to date will help you in your business task. Contact our experts to create yours today.

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