Business Attorney Orange County – Corporate Book Replacement

Written by: Andrew Gale - Orange County - Small Business Attorney

Q: Can I replace my corporate book and corporate records as I need to sell my business?

My family started a corporation many years ago. My father, the owner, and operator of the building died suddenly and now I want to sell his business. I can’t find the white corporate book with the corporation’s corporate records which held the corporate minutes. I saw it years ago but now cannot find it.

A: You may recreate lost or destroyed corporate records.

This is not an uncommon situation with small business corporations that do not have a business attorney that they work with regularly who would ordinarily keep the corporate book and corporate records.

Corporate Records Program

If your corporation was involved in a program similar to the Corporate Records Program, this would not be a problem because of the mandatory annual updating that happens to the corporate records through the program.

It is our opinion that re-creating corporate records is a much misunderstood and largely unexplored subject. The reason for this is that it involves a wide range of conduct, some of which is a natural part of everyday business life. To the layperson, re-creating corporate records may suggest wrongdoing of some type. However, the question of whether or not re-creating corporate records is right or wrong always depends upon its purpose and effect.

The problem with re-creating corporate records

The problem with re-creating records is that it describes a wide range of behavior on the part of business owners. On the one hand, you could be re-creating corporate records to commit blatant fraud. On the other hand, it can be employed in legitimate business practice as well. Whether or not a given situation of re-creating the corporate records is legitimate or improper is a complex, multifaceted question that frequently plagues the owners of small businesses.

What is the purpose of re-creating corporate records

If I were to boil this concept down to one simple principle it would be this: is the purpose of re-creating the records to merely memorialize something that actually occurred in the ordinary conduct of the business or is the corporate record being created to mislead someone into believing something occurred when in actual fact it did not.

If the records are being created simply to mislead a shareholder, director officer, or any third party who is acting in reliance on the corporate book, we would simply tell the person contemplating the re-creation not to do it. Why take the risk?

Memorializing corporate events

If you are simply attempting to memorialize the series of actions that occurred in the life of the corporation, I would first recommend that you call a meeting of the shareholders and board of directors and discuss the situation fully and openly. You should specifically discuss the issue of the lost records and your options for replacement.

Once the shareholders and directors have agreed to re-create the records for the purpose of memorializing past acts and decisions, I would further recommend that you add a corporate resolution to the corporate minutes of shareholders and minutes of the board of directors that specifically approves the re-creation of the corporate records and ratifies the previous decisions of the officers and directors of the corporation. I hope this helps.