In this blog post, Turab Chimthanawala, a visually challenged student, completing his Company Secretary course from Nagpur provides an in-depth view on the minutes of a Board Meeting. 

 

 Introduction

A company being an artificial legal person has to function through its Board of Directors. Thus, most of the major decisions and deliberations of the company take place at the Board meeting. The minutes of the Board meeting form an integral part of the working of the company.

Palmer’s Company Law defines minutes as the written record of the business transacted and the decisions made at a meeting. In a myopic sense, it is understood as a record of resolutions.

Secretarial Standard 1 has defined minutes as “a formal written record, in physical or electronic form, of the proceedings of a Meeting.”

As per Section 118 of the Companies Act, 2013 every company shall prepare, sign and keep minutes of the proceedings of every meeting within 30 days of the conclusion of every such meeting concerned. Minutes kept shall be evidence of the proceedings recorded in a meeting.

Rule 25 of the Companies (Management and Administration) Rules, 2014 And Secretarial Standard 1 clause 7 contain substantive provisions relating to the minutes of the Board Meeting. The ICSI has prepared an Exposure Draft of Secretarial Standard 5 which also deals with minutes. However, it is yet to be notified.

 

Provisions Relating to the Minutes of the Board Meeting

Provisions relating to the minutes of the Board Meeting are summarized below.

Minutes Book

A distinct minutes book shall be maintained for meetings of Board and each of its committees. Minutes may be maintained in the physical or electronic form in such a manner as prescribed under the Act and as may be decided by the Board. Minutes in the electronic form shall be maintained with a time stamp.

Minutes shall not be pasted or attached to the minute book or tampered in any manner. Minutes of proceedings of each meeting shall be entered in the books maintained for that purpose within 30 days of the conclusion of the meeting.

Each page of the minute’s book shall be initialed or signed, and the last page shall be dated and signed by the chairman of the said meeting or the chairman of the next meeting. This shall be equally applicable for maintenance of Minutes Book in electronic form with Timestamp. In the event any page or part thereof in the Minutes Book is left blank, it shall be scored out and initialed by the Chairman who signs the Minutes.

Binding of Minutes: If maintained in loose-leaf form, the minutes of the meeting shall be bound periodically depending on the size and volume and coinciding with one or more financial years of the company.

Every company shall follow a uniform and consistent form of maintaining the Minutes. Any deviation in such form of maintenance shall be authorized by the Board.

Minutes, once entered in the minute book, shall not be altered. Any alteration shall be with the express approval of the Board at its subsequent meeting. Any document, report or notes placed before the Board and referred to in the minutes shall be identified by initialing such document, report or notes by the CS or the Chairman.

Signing and Circulation of the Minutes

The minutes shall be signed by the Chairman of the said meeting or next meeting. Draft Minutes shall be circulated within 15 days from the date of conclusion of the meeting of the Board or the Committee and the minutes shall be entered in the minute’s book within 30 days from the date of conclusion of the meeting.

The Directors, whether present at the Meeting or not, shall communicate their comments, if any, in writing on the draft Minutes within seven days from the date of circulation thereof, so that the Minutes are finalized and entered in the Minutes Book within the specified time limit of thirty days.

If any Director communicates his comments after the expiry of the said period of seven days, the Chairman shall have the discretion to consider it if in his opinion it is in the best interest of the company.

A copy of the signed minutes certified by the Company Secretary or where there is no Company Secretary, by the Director authorized by the Board shall be circulated to all the directors within 15 days after these are signed.

Place of Keeping Minutes

Minutes of the Board and committee meetings shall be kept at the registered office or at such other place as may be approved by the Board.

Inspection of the Minutes Book

The minutes of the meeting of the Board and any committee thereof can be inspected by the Directors. Inspection of minutes book may be provided in physical or in electronic form.

Preservation of the Minutes Book

Minutes of all meetings shall be preserved permanently in physical or in electronic form with the time stamp. Minutes shall be kept in the custody of the Company Secretary, if there is no CS, then in the custody of any director duly authorized for the purpose by the Board. Office copies of notices, agenda, notes on agenda, and other related papers shall be preserved in good order in physical or in electronic form for as long as they remain current or for eight financial years, whichever is later and may be destroyed thereafter with the approval of the Board.

 

Content Of The Minutes

The content of the Minutes are divided into two parts, that is, General Content and Specific Content. Let us understand each of them closely.

General Contents: General Contents include the ones given below:

• State at the Beginning: At the beginning, the minutes shall state the following:
  • The serial number
  • Type of the Meeting
  • Name of the company
  • Day, date, venue and time of commencement of Meeting
  • Conclusion of the Meeting

• Persons present:
  • Names of the Directors present physically
  • Names of the Directors present through Electronic Mode
  • The Company Secretary who is in attendance at the Meeting
  • Invitees, if any, (including Invitees for specific items)
  • The names of the Directors shall be listed in alphabetical order but the name of Chair at first.
  • In the case of invitees the capacity in which he attends the meeting shall also be specified.
  • In case the invitee attends on behalf of an entity, the name of the entity such Invitee represents and the relation if any, of that entity to the company shall also be recorded.

Specific Content: After mentioning the general content the following matters shall also form part of the minutes

• Record of Election of Chairman of Meeting:
  • In case there is Chairman of the Board, then that person will be Chairman of the Board Meeting.
  • If there is no Chairman of the Board, and If there is Chairman but he is absent then directors will appoint any person from themselves as Chairman of the Meeting.

• Granting of Leave of Absence: If any director is absent and given leave of absence to Company, Chairman will record the Leave of Absence.

• Mode of Attendance of Director: Chairman will record the presence of director along with the mode of presence, i.e., Physical or through electronic mode.

• The presence of quorum: Chairman will check the quorum and record the quorum.

• Details of directors attending the meeting through video conferencing: In case a director participates through video conferencing then the following shall be recorded:
  • Location from where he attends the meeting.
  • Items on the agenda in which he participated.

• Noting of the Minutes of the preceding Meeting: In the Board Meeting company will take note the Minutes of last Board Meeting by circulation of signed copy of minutes to all the present directors.

• Noting the Minutes of the Meetings of the Committees: If any committee is incorporated by the Company, then in the board meeting of Director Company will note the Minutes of Committee Meeting.

• Noting of the resolution passed by circulation: If any resolution has been passed by circulation, then the company shall take note of the same. This shall include:
  • The text of Resolutions
  • Recording of dissent or abstention, if any

If any Director has participated only for a part of the Meeting, the Agenda items in which he did not participate. If any Director is interested in any resolution, then at the time of the passing of that resolution, mention about the interest of that director.

• Other items to be mention in Minutes:
  • Apart from the Resolution or the decision, Minutes shall mention the brief background of all proposals and summarize the deliberations thereof.
  • In the case of major decisions, the rationale thereof shall also be mentioned.
  • The decisions shall be recorded in the form of Resolutions where it is statutorily or otherwise required.
  • In other cases, the decisions can be recorded in a narrative form.
  • Other important points

Duties of the Chairman

The Chairman has absolute discretion to exclude from the Minutes, matters which in his opinion are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceedings or which are detrimental to the interests of the company

Minutes shall be written in clear, concise and plain language:

• Minutes shall be written in the third person and past tense.
• Resolutions shall, however, be written in present tense.
• Minutes need not be an exact transcript of the proceedings at the Meeting.

Any document, report or notes placed before the Board and referred to in the Minutes shall be identified by initialing of such document, report or notes by the Company Secretary or the Chairman. Wherever any approval of the Board is taken on the basis of certain papers laid before the Board, proper identification shall be made by initialing of such papers by the Company Secretary or the Chairman and a reference thereto shall be made in the Minutes. Where any earlier Resolution (s) or decision is superseded or modified, Minutes shall contain a reference to such earlier Resolution (s) or decision. Thus, it is mandatory for the company to maintain minutes in proper order