Key Provisions Relating to Minutes of Board and General Meetings

Provisions-Minutes-Board-General-Meetings

Key Provisions Relating to Minutes of Board and General Meetings


The term ‘minutes’ though not defined in the Companies Act, 2013 may be considered as a written record of proceedings of a meeting of any Company duly kept in pursuance of the law.

The expression "minutes" means a brief summary of the proceedings of a meeting. Minutes should contain a fair and correct summary of the proceeding of the meeting and should normally convey why, how and what conclusions were arrived at in relation to each business transacted at the meeting. It need not be an exact transcript of the proceedings.

CLASSIFICATION OF MINUTES
Minutes can be classified into the following three types on the kind of meeting to which they relate
1. Minutes of Board meetings
2. Minutes of meetings of committee of the Board
3. Minutes of General meetings

STATUTORY PROVISIONS
Section 118 provides that:
(1) Every company shall cause minutes of the proceedings of every general meeting of any class of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the conclusion of every such meeting concerned, or passing of resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.
(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.
(3) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting.
(4)  In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also contain—
(a)  the names of the directors present at the meeting; and
(b) in the case of each resolution passed at the meeting, the names of the  directors, if any, dissenting from, or not concurring with the resolution.
(5)  There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,—
(a) is or could reasonably be regarded as defamatory of any person; or
(b) is irrelevant or immaterial to the proceedings; or
(c) is detrimental to the interests of the company.
(6)  The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in sub-section(5).
(7)   The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein.
(8)   Where the minutes have been kept in accordance with sub-section (1) then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and the resolutions passed by postal ballot to have been duly passed and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.
(9)   No document purporting to be a report of the proceedings of any general meeting of a company shall be circulated or advertised at the expense of the company, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.
(10) Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.
(11) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.
(12) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.”

MINUTE BOOKS

The minutes should be kept in books kept for that purpose. Consequently, minute books should be separate from other books. Even though the minutes of the proceedings of general meetings and board meetings may be kept in one book, the usual practice is to keep them in separate books as the right of inspection of minutes of board meetings is limited.

Minutes are normally entered into a bound book by hand. In this way, the secrecy and confidentiality are maintained. In the case of loose leaf minutes, the matter is typed. It is important to note that a collection of loose leaves fastened together between the covers but readily detachable is not a book. The minutes should be entered into a bound book, by hand, it cannot be in a loose leaf binder and type written.

As per rule 25(1)(b), the minutes of proceedings of each meeting shall be entered in the books maintained for that purpose along with the date of such entry within thirty days of the conclusion of the meeting.

PLACE FOR KEEPING MINUTE BOOKS

As per Rule 25(1)(e) the minute books of general meetings, shall be kept at the registered office of the company and shall be preserved permanently and kept in the custody of the company secretary or any director duly authorised by the board or at such other place as may be approved by the Board.

Rule 25(1)(f) provides that the minutes books of the Board and committee meetings shall be preserved permanently and kept in the custody of the company secretary of the company or any director duly authorized by the Board for the purpose and shall be kept in the registered office or such place as Board may decide.

SIGNING OF MINUTES

Under Rule 25(1)(d) each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting or each report in such books shall be dated and signed –

(i)  in the case of minutes of proceedings of a meeting of the Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding meeting;
(ii)  in the case of minutes of proceedings of a general meeting, by the chairman of the same meeting within the aforesaid period of thirty days or in the event of the death or inability of that chairman within that period, by a director duly authorised by the Board for the purpose;
(iii) in case of every resolution passed by postal ballot, by the chairman of the Board within the aforesaid period of thirty days or in the event of there being no chairman of the Board or the death or inability of that chairman within that period, by a director duly authorized by the Board for the purpose.

Minutes of a Board meeting which was held in accordance with the directions of a court are to be signed by the chairman appointed by the court and such minutes are to be taken as authentic minutes.
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