Minutes of Board Meeting under Companies Act 2013 & Secretarial Standard 1

The drafting and maintenance of minutes of meetings has traditionally and for long been a core function of the Company Secretary.

Justifiably so, for, the Company Secretary doesn’t merely writes minutes, he writes history- the history of the company, the history of the corporate sector and, in a vicarious manner, of the economy and the country. The minutes are the summary of the distilled wisdom of the Board of directors, their view, thoughts and aspirations that provide strategic guidance and a road map for ensconcing it on the growth trajectory.

No doubt, it is duty of the Companies Secretary to comply with the Secretarial Standard. The Company Secretary, in his role as minutes writer, needs to be aware of the onerous responsibility cast upon him, in as much as, every decision that is taken, including how and why it was taken will be cast in stone by his minuting. It is imperative for the Company Secretary to thus keep in mind the rule of interpretation while drafting them.

“After the enforcement of Companies Act, 2013 Ministry of Corporate Affairs (MCA) vide letter No. 1/3/2014-CL-I dated April 10^th, 2015 has accorded its approval under Section- 118(10) of Companies Act, 2013.”

As per SS 1 Minutes means “a formal written record, in physical or electronic form, of the proceeding of a Meeting”.

PROVISIONS APPLICABLE FOR PREPARTION OF MINUTES

a. Section 118 of Companies Act, 2013 is relating to Minutes of Board Meeting and Committee Meeting.

b. Rule- 25 of the Companies (Management and Administration) Rules, 2014.

c. Secretarial Standard- I issued by ICSI given the provisions of Maintenance of Minutes.

PROCEDURE OF MAINTENANCE OF MINUTES:

NOTE:

• Minutes shall be Recorded in Books Maintained for that purpose.
• A Distinct Minutes Book shall be maintained for Meetings of the Board and each of its Committees.
• A Company may maintain its Minutes in physical or in electronic form with Timestap.
• Every company shall however follow a uniform and consistent form of maintaining the Minutes. Any deviation in such form of maintenance shall be authorized by the Board by way of passing of Resolution.

(Company can’t maintain minutes in both manner altogether physical and some in electronic form. Company must be uniform in maintenance of Minutes whether in physical or electronic)

PRECAUTIONS TO BE TAKEN WHILE PREPARING THE MINUTES:

♣ PAGE NUMBERING:

i.  The pages of the Minutes Books shall be consecutively numbered. This shall be followed “irrespective of a Break” in the book arising out of periodical binding in case of the Minutes.

(e. g. If Company done two board meeting. Pages in minutes of first Board Meeting was 5 and pages in second Board Meeting was 8 Then pages will be numbered as follow: 1,2,3,4,5,6,7,8,9,10,11,12,13. Minutes should be consecutively numbered without any break).

ii. This shall be equally applicable for maintenance of Minutes Book in electronic form with Timestamp.

iii. 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:

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

ii. Minutes shall not be pasted or attached to the Minutes Book, or tampered with in any manner.

♣  Place of keeping of Minutes:

• Minutes of the Board Meeting shall be kept at the Registered Office of the company or
• If Company want to maintain any place other then Registered Office of the Company, than company will Pass a Board Resolution for the same in the Meeting of Board of Directors.
  

FINALIZATION OF MINUTES:

CIRCULATION OF DRAFT MINUTES BOOK:

a) Circulation of draft Minutes:

i. Within 15 (fifteen) days from the date of the conclusion of the Meeting of the Board or the Committee, The draft Minutes thereof shall be circulated to all the directors of the Board or the committee for their comments.

b. MODES of circulation of draft Minutes:

i. By hand or by speed post or by registered post or by courier or by e-mail or by any other recognized electronic means. Except IF,

ii. Director specifies a particular means of delivery of draft Minutes, then Draft Minutes shall be circulate him by such means.

iii. If the draft minutes are sent by speed post or by registered post or by courier, an additional “2 (TWO) Days may be added for delivery of the draft Minutes.

iv. PROOF of sending of draft Minutes and Delivery shall be maintained by the Company.

c. Comments by Directors and Time Period for Comment on draft minutes:

i. 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

ii. If any Director communicates his comments after the expiry of the said period of seven days, the Chairman shall have the discretion to consider such comments.

iii. In the event a Director does not comment on the draft Minutes, the draft Minutes shall be deemed to have been approved by such Director.

d. Who is entitled to receive draft minutes:

i. Even if director cease to be a Director after a Meeting of the Board he is entitled to receive the draft Minutes of that particular Meeting and comment thereon.

ii. Even if director doesn’t attend Meeting of the Board he is entitled to receive the draft Minutes of that particular Meeting and comment thereon.

ENTRY IN MINUTES BOOK

I. TIME PERIOD for Entry:

• Minutes shall be entered in the Minutes Book within 30 (Thirty Days) from the date of conclusion of the Meeting.
• In case of adjourn Meeting:

The Minutes in respect of the original Meeting as well as the adjourned Meeting shall be entered in the Minutes Book within thirty days from the date of the respective Meetings.

ii. DUTY of Entry in Minutes Book:

• The date of entry of the Minutes in the Minutes Book shall be recorded by the Company Secretary.
• Where there is no Company Secretary, it shall be entered by any other person duly authorized by the Board or by the Chairman.
  

iii. Record of Entry in Minutes Book:

• Minutes, once entered in the Minutes Book, shall not be altered.

EXCEPT:

• Any alteration in the Minutes as entered shall be made only by way of express approval of the Board at its subsequent Meeting in which such Minutes are sought to be altered.
  

SIGNING AND DATING OF MINUTES:

A. Who is authorized to sign Minutes?

• Minutes of the Meeting of the Board shall be signed and dated by the Chairman of the Meeting or by the Chairman of the next Meeting.

• Minutes of the previous Meeting may be signed either by the Chairman of such Meeting at any time before the next Meeting is held or by the Chairman of the next Meeting at the next Meeting.
  

♣  How to Sign Minutes?

• The Chairman shall initial each page of the Minutes,
• Chairman will sign the last page
• The Chairman will mention Date on last Page.
• The Chairman will mention Place on last Page.
  

♣ If minutes are prepared in electronic mode then how they will get sign?

If the Minutes are maintained in electronic form, the Chairman shall sign the Minutes digitally.

♣  Alteration in the Minutes after Signature:

Minutes, once signed by the Chairman, shall not be altered, save as mentioned in this Standard.

♣ Time period for circulation of “CERTIFIED COPY OF” Signed Minutes:

A copy of the “CERTIFIED COPY OF” signed Minutes certified by the Company Secretary or where there is no Company Secretary, by any Director authorized by the Board shall be circulated to all Directors within 15 (fifteen) days after these are signed

TIME PERIOD FROM MEETING TO CIRCULATION OF FINAL MINUTES:

• Circulate Draft Minutes with in 15 (Seven) days of conclusion of Meeting.
• Comment by Director on draft Minutes within 7 days of Circulation of Draft Minutes.
• Signing of Final Minutes by Chairman within 30 days of Conclusion of Meeting.
• A copy of signed Minutes Certified by Company Secretary (If no company Secretary then by Director authorized by Board) shall circulate within 15 days after these are signed.
  

INSPECTION AND EXTRACTS OF MINUTES:

INSPECTION

♣ Who can inspect the Minutes of Board Meeting and Committee Meeting?

1. DIRCTORS” can inspect the Minutes.
2. Company Secretary in Practice appointed by the company
3. Secretarial Auditor,
4. the Statutory Auditor
5. the Cost Auditor
6. the Internal Auditor of the company

• Even a director after his resignation/Cessation can inspect Minutes of Meeting held during period of his directorship.

♣  MEMBER OF THE COMPANY IS NOT ENTITLED TO INSPECT THE MINUTES BOOKS.

INSPECTION

♣  Extracts of the Minutes shall be given only after the Minutes have been duly entered in the Minutes Book.

♣  Certified copies of any Resolution passed at a Meeting may be issued even earlier, if the text of that Resolution had been placed at the Meeting.

{If company is passing any resolution with the reference of earlier resolution then give reference of earlier pass resolution in new resolution}.

♣  Who can get the extracts of the Minutes of Board Meeting and Committee Meeting?

Only “DIRCTORS” can inspect the Minutes.

PRESERVATION OF RECORDS:

MINUTE BOOKS:

a) Duration for Preservation:

Minutes books shall be preserved PERMANENTLY, whether in Physical or Electronic form.

NOTICE/AGENDA & NOTES:

a. Duration of preservation:

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.

b. How to destroy:

May be destroyed thereafter with the approval of the Board.

A. CUSTODIAN OF MINUTES BOOK:

• Company Secretary
• Where there is no Company Secretary, Any director duly authorized by Board for the purpose. {If there is No CS, Companies required passing a Board Resolution to authorized any director of the company to preserved the Minutes Book}.

MAJOR COMPLIANCES RELATING TO MINUTES:

• The Annual Report and Annual Return of a company shall disclose the
  • Number and
  • Dates of Meetings of the Board and Committees held during the financial year
• The Annual Report and Annual Return of a company shall indicate the number of Meetings attended by each Director
  

CONTENT OF THE MINUTES:

Content of the Minutes are divided into two parts:

i. General Content

ii. Specific Content

i. General Contents: General Contents include the following below given:

a) State at Beginning: At the beginning minutes shall state the followings:

• The serial number
• Type of the Meeting
• Name of the company
• Day, date, venue and time of commencement of Meeting
• Conclusion of the Meeting

(This is New and important concept that “Minutes will record Day, Date, Venue and time at the Beginning of the Meeting and at Conclusion of the Meeting)

b) Person Presents:

• 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)

Precautions while preparation of Minutes:

• The name of the director starting with the name of the person in the Chair.
• The names of the Directors shall be listed in alphabetical order but name of Chair at first.
• The name of invitees in the capacity in which an Invitee attends the Meeting.
• In case of invitee attend on behalf of entity, the name of the entity such Invitee represents and the relation, if any, of that entity to the company shall also be recorded

ii. Specific Contents:

After mention the general content in Minutes, below given are the specific contents:

a) 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.

b) Granting of Leave of Absence:

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

Company should receive a Letter of “Leave of Absence “from the absent director.

c) Record Mode of Attendance of Director:

Chairman will record the presence of director along with mode of presence i.e. Physical or through electronic mode.

d) Record presence of quorum:

Chairman will check the quorum and record the quorum.

e) Record Detail of Director present through video conferencing:

If any director will participate through then Chairman will record the following: His particulars, the location from where and the Agenda items in which he participated.

This will be done by roll call. Chairman will take roll call of directors present through video commencing.

f) 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.

g) 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 take note the minutes of Committee Meeting.

h) Noting of resolution passed by circulation:

If company has passed any resolution by circulation resolution then company will take noting of such resolution in the upcoming minutes.

The will take note the following:

• The text of Resolutions
• Recording of dissent or abstention, if any

i) 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 passing of that resolution mention about interest of that director.

j) Other items to be mention in Minutes:

• Apart from the Resolution or the decision, Minutes shall mention the brief background of all proposals and
• summaries the deliberations thereof
• In 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.

B. RECORDINGS OF MINUTES:

a) Minutes shall contain a fair and correct summary of the proceedings of the Meeting:

• The Company Secretary shall record the proceedings of the Meetings.
• Where there is no Company Secretary, any other person duly authorized by the Board or by the Chairman in this behalf shall record the proceedings.
• The Chairman shall ensure that the proceedings of the Meeting are correctly recorded.

Power of Exclusion:

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.

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

• Minutes shall be written in 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.

c) Verification of relevant Documents:

• 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 initialling of such papers by the Company Secretary or the Chairman and a reference thereto shall be made in the Minutes.
  

d) Superseded or Modified Resolution

Where any earlier Resolution (s) or decision is superseded or modified, Minutes shall contain a reference to such earlier Resolution (s) or decision.

(Author – CS Divesh Goyal, ACS is a Company Secretary in Practice from Delhi and can be contacted at [email protected])

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