BOARD MEETINGS MINUTES

COMPANY INCORPORATION IN INDIA - BOARD MEETINGS MINUTES

1. Minutes of decisions or resolutions

Whenever the directors of the company make any formal decisions at official meetings, they are recorded as the Minutes of decisions, with the ‘Resolve’ added before every such decision. There are different methods to record the resolution Minutes. The simplest way would be to just write down the resolutions. They may also include the mover and seconder of the proposition as well the manner of executing it. Though both forms of recording are acceptable, some advice that the first form should be used in general meetings while the second form be reserved for more critical Board meetings. Still this is not a rule that has been cast in stone. Some meetings involve small explanations on the need and urgency of a particular resolution. These can be accommodated in the last type of minute recording where these recitals are affixed before the resolutions themselves.

It is inadvisable and a step fraught with risk to record the discussions which led to adoption of specific resolutions or decisions. It is a more sensible method to stick with the accepted resolutions and decisions and the name of the people who proposed and seconded them. These rules also apply to certain special events such as when the Chairman carries through or rules on motions.

Time is of the essence in matters regarding the minutes of the decisions or resolutions and thus should be drafted and recorded immediately after the meetings are wrapped up.

Where there is only one director on the Board of Director of a One person Company, any business which is required to be transacted at the meeting of the Board of Directors of a company, it shall be sufficient if, in case of such One Person Company, the resolution by such director is entered in the minutes book required to be maintained under section 118 and signed and dated by such director and such date shall be deemed to be the date of the meeting of the Board of Directors for all the purposes under this Act.

2. Time-limit for recording and signing of minutes of Board meetings.

According to Section 118 of the Companies Act, 2013, the company should record the minutes of proceedings of every Board of director meeting in books, with consecutively numbered pages, kept specifically for that purpose. These entries should be made within a month of the respective meeting. The signing, however, of those meetings can be done later. (Department of Company Affairs’ (MCA) circular NO. 25 of 1975, dated 1 September, 1975.

There is no need to wait till the next meeting of the Board to get the minutes signed of the previously convened meetings. The sign of the Chairman of the respective meeting may be obtained at any time before the next meeting. Also it is not legally required that the minutes of the meeting be confirmed at the subsequent meeting. [Department of Company Affairs’ (MCA) Circular No. 8/2 Misc. 75-CL- V, dated 5 May, 1975.

That being said, it is nowadays a common practise for the chairman to confirm and sign the minutes at the succeeding meeting. Confirmation is nothing but noting. Though the practise is not a legal pre requisite it owes its widespread use to the fact that it’s a sensible secretarial practise. Distributing the draft of the minutes to the directors is a good practise also.

The last date for the signing of the Minutes is the date of the next board meeting. Though it is not required that every director attending that meeting sign the minutes [Prafulla Kumar Rout v orient Engg. Works Pvt. Ltd. 91986) 60 COMP Cas 65 (Ori) their names should be mentioned. Mentioning the names of the directors who were absent at the respective meeting is also a good practise. Also appending the statement of whether they had obtained a grant of absence or not is desirable. When a board meeting is conducted under the express direction of a court, the minutes are to be signed by the court appointed chairman. Such minutes are to be considered as real and valid.

3. Correction in the minutes of the Board Meetings

Once put into record and signed, the minutes may not be altered in any physical manner and so no subsequent additions or editions can be made on them. {Re, Cowley & Co42 Ch d 204} if an alteration displays a significant deviation from the previous minutes, the appropriate procedure is to move a resolution at the very next meeting and point to the earlier resolution as a cross reference.

4. Adoption of minutes of Board Meetings

Recording the minutes in the minutes book, after getting the draft approved by the chairman is a common practise. The agenda of the next meeting is either preceded by or simultaneously distributed along with the draft of the minutes to the directors. The board formally adopts the recorded minutes of the previous meeting allowing the chairman to date and sign them. A more proper way to record the Board’s approval is to state that the Board approved the minutes of the previous meeting of the board held on, rather mentioning that the Board confirmed minutes of the last meeting’.

5. Action on any resolution can be taken after conclusion of the meeting

All resolutions and decisions can and may be executed immediately after the respective meeting is over. There is no need to put off actions until the minutes are formally recorded, signed and adopted at the subsequent meeting.

6. Numbering of minutes and resolutions

The minutes of the meeting may be numbered in one of the following ways:-

• The minutes may be ordered in sequence like 1st, 2nd 3rd and so forth so as to confirm on as to confirm that they have not been altered at any stage after the board meeting.
• Another mode of numbering is to affix the serial number of the meeting to the number of the item under consideration such as 1.2, 4.12, and 6.7 where 1, 4 and 6 would denote the Board meeting number and 2, 12 and 7 point to the particular item. It may be noted that he number should be confined to special items and not to routine matters.

7. Circulation of the minutes of the board meetings among the directors

Confirmation of the minutes of the Board meeting at succeeding meetings and its distribution among the directors has not been contemplated by the Companies Act, 2013. Normally such conditions or rules are imposed by bodies which nominate directors including financial institutions, banks, etc.

Distribution of the minutes of the meeting is also required by such bodies. Circulating the minutes, after recording and signing them, should be done among the following also:-

• All the directors, including nominee director of company
• The financial instituters/banks which have nominated director on the Board of accompany.

8. Inspection of the minutes of the Board meetings.

Though The Companies Act, 2013 doesn’t provide any guidelines with regard to the inspection of the Board meeting minutes books, auditors are allowed to inspect them for irregularities, as shall be the directors.

The Right to inspection of the minutes cannot be denied to the member in any case.

Related registers and files to the minutes of the Board meetings

Other allied registers may also be maintained along with the main minutes book of the Board meetings.

• Attendance Register of directors
• Common Seal Register
• Index of Minutes Register
• Agenda Book.

Other documents including, but not limited to, the file having the notices of Board meetings, letters of disclosures made by the directors, copy of the statements placed before the meeting duly initialled by the chairman need to be maintained at the official registered office of the firm. Also, a proof that the notice has been dispatched to the directors, a copy of the resignation letter from the directors and agenda papers should be present.