You must take the required actions to keep your firm afloat after spending time and money to establish it. One key step is to make sure you have all of the supporting papers to verify that your company is genuine. Tax Accountant Toronto team will go through why a minute book is necessary for every business.
A minute book may be used to keep track of major transactions or activities in your company. A minute book is also useful for recording certain important decisions made by the organization’s management or directors throughout the year.
Tax accountant Toronto team state that minute books are legally required. You must have a current minute book that includes all critical information about decisions taken in your business.
Tax Accountant Toronto experts recommend you to keep an up-to-date minute book to demonstrate how well your company is run. Keeping a detailed minute book may help you obtain a loan from a financial institution.
When banks evaluate whether or not to approve a loan, they frequently look at the quality of your recordkeeping for the firm’s major operations. As a result, keeping an up-to-date minute book demonstrates that your business is well managed and organized.
Are you thinking of selling your firm in the near future? Keep an up to date minute book first. This critical document may assist purchasers in comprehending various aspects of your business.
Tax accountant Toronto team state that good thing is that it provides information on when and why certain decisions were made, as well as evidence that your company is a good investment. Remember that poor record keeping might actually degrade your firm’s value.
If your company is required to be audited, one of the things the auditor will want is a record of your major transactions and decisions. Having a minute book can really assist the auditor in seeing that there are substantive records for your major commercial activities.
In fact, keeping a minute book may help you guarantee that your claims are accepted by the IRS.
During an audit, the CRA may request to see the corporate’s minute book to determine if a director’s resolution allowing payment of dividends within the year was made.
Dividends are typically taxed at a lower rate than bonuses and salaries, thus tax authorities are constantly on the lookout for firms that take advantage of this to cut their taxes.
When you create a minute book, you can demonstrate that such a resolution was made, which would negate your claims being disputed.
Tax Accountant Toronto team speculate that it is possible that if you do not submit documents to show that dividends were authorized, your payment will be re-characterized as salary and increased in tax. You could be penalized for failing to follow the required rules.