The Institute of Company Secretaries of India (ICSI) has issued secretarial standards to guide companies on the maintenance and importance of minutes under the Companies Act, 2013. These standards aim to promote good corporate governance by setting out best practices for maintaining accurate and comprehensive minutes of meetings. In this article, we will discuss the provisions and secretarial standards issued by ICSI with respect to the importance and maintenance of minutes.
One of the primary reasons for maintaining minutes is that they serve as evidence of compliance with the provisions of the Companies Act, 2013. The Act mandates that every company must keep minutes of all general meetings, board meetings, and committee meetings. Failure to maintain minutes can result in penalties and legal consequences for the company, its directors, and officers.
Provisions under Companies Act, 2013:
The Companies Act, 2013 mandates that every company must maintain minutes of all general meetings, board meetings, and committee meetings. Section 118 of the Act requires that minutes must be recorded in books maintained for that purpose, and must contain a fair and correct summary of the proceedings of the meeting. The Act also requires that minutes must be signed by the chairperson of the meeting or by the chairperson of the next succeeding meeting.
The minute’s 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. Failure to maintain minutes or maintain them in accordance with the provisions of the Act can result in penalties and legal consequences for the company, its directors, and officers.
Secretarial Standards on Minutes:
The ICSI has issued Secretarial Standards which provide guidelines for the maintenance and importance of minutes under the Companies Act, 2013. These standards aim to promote good corporate governance and ensure compliance with the legal provisions regarding minutes.
According to the standards, the minutes must be clear, concise, and complete. They must include the following information:
1. The date, time, and place of the meeting.
2. The names of the directors, committee members, or shareholders present at the meeting.
3. The names of the absentees and their reasons for absence.
4. The agenda items discussed at the meeting.
5. The decisions taken on each agenda item.
6. The rationale behind the decisions taken.
7. Any dissensions or objections raised by the directors, committee members, or shareholders.
8. The follow-up actions to be taken and the persons responsible for the same.
9. The time and date of the next meeting.
Scope of the Standards:
The Secretarial Standards apply to all companies governed by the Companies Act, 2013. The standards cover the maintenance of minutes of all meetings, including general meetings, board meetings, and committee meetings.
Importance of Maintaining Minutes:
The ICSI has emphasized the importance of maintaining accurate and comprehensive minutes of meetings. Minutes serve as a reliable record of the company’s decision-making process and provide evidence of compliance with legal requirements. They also serve as a valuable source of information for internal and external stakeholders, including shareholders, regulatory authorities, and auditors.
Maintenance of Minutes:
The Secretarial Standards on Minutes set out best practices for maintaining minutes. These standards require that minutes must be maintained in books kept for that purpose and must be recorded in a chronological order. The minutes must be clear, concise, and self-contained, and must contain a summary of the proceedings, including the time and place of the meeting, the names of those present, and the business transacted.
Default in maintenance of Minutes:
The company shall be liable to a penalty of Rs.25,000 and every officer of the company who is in default shall be liable to a penalty of Rs.5,000
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.