Substance is examined after the fact and never in advance. No authority reviews a structure at formation and certifies that it will be adequate; the question arises later, in the course of an enquiry, a treaty claim or a review, and it is asked about a period that has already closed. Whatever the structure did during that period, the only account of it available is whatever was written down at the time.
This is what separates substance from most other compliance obligations. A filing can be made late. A register can be corrected. A contemporaneous record cannot be created after the event, and an attempt to create one is worse than the gap it was meant to fill, because it converts a question about substance into a question about the reliability of the whole file.
What is actually being tested
The enquiry is whether the entity did, in the place it claims, the things it claims to do. For a holding company that means whether the decisions about its participations were taken there, by people with the authority and the knowledge to take them. For an entity carrying on an activity, it extends to whether the people, the premises and the expenditure appropriate to that activity were present, and whether the income attributed to the entity corresponds to what those people actually did.
None of this is answered by the constitutional documents. A certificate of incorporation establishes where an entity is registered, which is precisely the fact not in dispute. The material questions concern conduct over a period, and conduct is evidenced by minutes, by correspondence, by travel, by contracts and by the ordinary record of an entity operating rather than existing.
A file assembled in response to an enquiry answers a different question from the one asked: it shows what the entity can now demonstrate, not what it did at the time.
The record that has to exist at the time
Board minutes are the centre of it, and they are most useful when they are least formulaic. A minute recording that the directors resolved to approve a transaction establishes almost nothing; a minute recording what was presented, what alternatives were considered, what was decided and on what basis establishes that a decision was taken by the people named. The distinction costs very little at the time and is difficult to reconstruct afterwards.
Around the minutes sit the ordinary artefacts of an entity conducting its affairs: the papers put before the board, the correspondence with advisers, the evidence that the meeting happened where it says it happened, the engagement of any service provider and what that provider was actually asked to do. Where functions are outsourced, the record should show what the entity retained rather than only what it delegated, because an entity that has delegated everything has not obviously done anything.
Building it as the work proceeds
The practical answer is to treat the substance file as an output of running the structure rather than as a separate compliance exercise. Decisions are taken in any event; the additional work is recording them properly at the point they are taken, filing the supporting papers with the minute, and keeping the whole in a form that can be produced without reassembly. Structures administered this way generate their evidence as a by-product.
The alternative is familiar. An enquiry arrives, and the group begins reconstructing several years of activity from calendars, inboxes and the recollections of people who have since moved on. What emerges is usually accurate and almost never persuasive, because it carries every sign of having been assembled for the purpose. The underlying position may have been entirely sound throughout, and by that stage the underlying position is not what is being examined.
This note is general in application and does not constitute legal, tax or regulatory advice. It describes practice observed across institutions and should not be relied upon in relation to any particular structure.