Arjun Tyagi
Brief Introduction
Secretarial standard-1 is related with “Meetings of the Board of Directors” issued by ICSI and further approved by the Central Government. As per provisions of Sec.118 (10) of the Companies Act-2013, “Every company shall observe secretarial standards w.r.t. general and Board meetings specified by the Institute of Companies Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980, and approved as such by the Central Government”
Till now there are two Secretarial Standards i.e. SS-1, SS-2 have been issued by the ICSI so far and further approved by the Central Government. In this article we will discuss various compliances enunciated by SS-1, regarding Board of Directors Meetings and other related provisions in this regard.
Secretarial Standard-1 (SS-1) is applicable on all Companies registered & incorporated under the Companies Act, 2013 & other previous laws except One Person Company. The effective date of enforcement of this standard is 1st July, 2015. This standard is in conformity with the provisions of the CA, 2013. However, in case of further amendments in law / Act and thus SS-1 becomes inconsistent with the law / Act; the provisions of the Act shall be prevailed.
The principles prescribed under SS-1 are also applicable on Meetings of Various Committee/s of the Board unless otherwise provided in this Standard or any other Rules/ Regulation/other applicable Guidelines. It also defined some of important terms under its ‘Definition Section’ which are further used frequently in standard text.
Compliances for Meeting
To simplify the various compliances regarding Board of Directors Meeting / Committee(s) Meeting as prescribed under SS-1, let us divide these compliances in to four major parts, these are given as below:
I. Compliances prior to the Meeting
II. Compliances during the course of the Meeting
III. Compliances after the Meeting
IV. Compliances in general (related with Meetings)
Now we shall discussed all of them separately in a summary form:
I. Compliances prior to the Meeting
| Compliances prior to the Meeting | ||
| Calling of Meeting | Notice of Meeting | Agenda of Meeting |
| Authority to Call
• Any Director of a company at any time By whom it may call • Company Secretary • Any other person authorized by Board Time & Place • At any time & any place • On any day, except National Holiday Every Meeting Shall have a Serial Number Mode of Meeting • Physically Mode /personal presence • Electronic Mode i.e. Audio & Visual means There are some Restricted Items for which electronic mode is not available, unless expressly permitted by the Chairman. Such restricted items includes: i. Approval of the Annual Financial Statement ii. Board’s Report iii. Prospectus & matters relating to Amalgamation / Merger / Demerger / Acquisition and Takeover. iv. In case of Audit Committee for consideration of Annual Financial Statement including CFS, if any, to be approved by the Board. |
Type
• Only Written Notice Medium I. By hand II. By e-mail III. By Speed / Registered Post IV. By Courier V. By facsimile VI. By any other electronic means To whom • All Directors Where • On registered address of the Director • Registered address on DIN By Whom • Company Secretary • Where there is no CS, any other person Authorized by Board When • At least Seven days prior to the date of meeting. • In case of post/ courier, additional Two days shall be added i.e.7+2 for the service of Notice Other Requirements • Shall be serially numbered with day/date/ time and full address of venue of the Meeting • In case of meeting through electronic mode full disclosure shall be made in this regard in Notice. • Notice of a Meeting shall be given, even if Meetings are held on pre-determined dates. |
Inclusion
i. All business items to be transacted at the Meeting i.e. Agenda ii. Notes on Agenda How to send (Medium) I. By hand II. By e-mail III. By Speed / Registered Post IV. By Courier V. By facsimile VI. By any other electronic means To whom • All Directors Where • On registered address of the Director • Registered address on DIN By Whom • Company Secretary • Where there is no CS, any other person Authorized by Board When • At least Seven days prior to the date of meeting. • In case of by post/ courier, additional Two days shall be added i.e.7+2 i.e. 9 Days • Or a longer period if prescribed under the Articles. • Notes on items of business which are in the nature of Unpublished Price Sensitive Information may be given at a shorter Period of time Other • Each agenda item shall be serially numbered • Items not included in agenda may be consider with the permission of the Chair • Annexure-B of SS-1 provides list of agenda items for the First Board Meeting |
| Proof of sending the Notice and its Delivery shall be maintained by the company. | Proof of sending the Agenda & Notes on Agenda and its Delivery shall be maintained by the company. | |
II. Compliances During the Meeting
| Compliances during the Course of the Meeting | ||
| Attendance | Quorum | Chairman |
| Attendance Register
• Attendance of Directors / Members of Meeting shall be recorded by way of Attendance Register. • Every company shall maintain separate register for Meeting of Board & of its Committee • Pages of the respective attendance registers shall be serially numbered & if maintained in loose leaf form shall be bound periodically. Particulars of attendance register • Serial number • Date of Meeting • Place & time of Meeting • Name of Committee (in case of Committee Meeting) • Name & Signature of director presented & also CS or any person attending the Meeting Authentication • Entries in attendance Register shall be authenticated by CS or in absence of CS by the Chairman Leave of Absence • Leave of absence shall be granted to any director only when a written request of such leave has been received by the CS or Chairman • In case Director remains absent from all Meetings held during a period of 12 months with/ without seeking leave of absence, his/her office of director shall become vacant. |
For Board Meeting
• 1/3rd of total strength of the Board or Two Directors, whichever is higher, subject to the higher requirements prescribed under the articles, if any. For Committee Meetings • All the members of Committee unless otherwise provided under the act /any law /Articles / Board. • Regulations framed under any other law shall also be followed if any. Other Important Provisions • Any fraction in number shall be rounded off to the next one • Vacant position of director shall not be considered while counting Quorum • Interested directed shall not be included while calculating quorum and thus remaining directors, not less than two, shall form quorum. • Quorum must be present all the time i.e. commencement of meeting and during the meeting. • Quorum is essential for validly held meeting, without quorum meeting shall be considered as invalid. • If a Board meeting could not be held due to want of Quorum, the meeting shall automatically stand adjourned • If there is no Quorum in adjourned Meeting too, Meeting shall stand cancelled |
For Board Meeting
• Chairman of the company shall be the chairman of the Board Meeting • In case where company does not have a Chairman or he is unable to attend the Meeting, Directors present may elect Chairman of the Board among themselves subject to articles For Committee Meetings • A member appointed by the Board • Elected by the Committee itself among its members Other related provisions • Chairman of the meeting, with assistance of CS, shall have the duty to duly convened / constitution of the meeting in accordance with various laws/rules/provisions/ regulations etc. • The chairman shall conduct the meeting • The Chairman shall assess the true sense of the meeting • If the Chairman is interested in any business item, he shall not be present at the Meeting during discussion on such items and entrust the Chair to any Dis-interested Director • In case of equality of votes Chairman shall have second or Casting vote, unless otherwise provided in articles
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III. Compliances after the Meeting
| Compliances after the Meeting | ||
| Minutes | ||
| Preparation | Finalisation | Minutes Book |
| Maintenance
• Every company shall keep minutes of all Board & Committee Meetings in a Minutes Book in accordance with the provision of the act. • Distinct Minutes book shall be Maintained for meeting of Board & each of its committee. Manner • In physical form • In electronic form with Timestamp Contents SS-1 divided Contents of Minutes in two major parts: • General content • Specific content Hence now contents of minutes must be in accordance with prescribed provisions of SS-1 or other related applicable laws, if any. Who will Prepare / Record. • Company Secretary • Or in absence of CS any other person authorized by Board Other related aspects • The Minutes shall be written in clear, concise and plain language • Minutes shall contained a fair & correct summary of the proceeding of the meeting |
Draft Minutes
• Draft Minutes must be prepared & circulated within 15 Days from the date of conclusion of Meeting to all the members of the Board or to the Committee members in case of Committee Meeting. • Two additional days may be provided if the draft minutes are sent through post/ courier. • Proof of sending shall be maintained by the company Comments on Draft Minutes • The directors shall communicate Comments within 7 Days from the date of its Circulation • Any Director may communicate its comment, whether he attended or did not attended the meeting • After expiry of given period, comments may be consider at discretion of Chairman • If no comments received from Director, draft minutes shall be deemed as approved. Finalise the Minutes • After receiving comments, if any, draft Minutes shall be alerted accordingly • Chairman after considering the received comments, if any, shall finalise the minutes. |
Minutes Book
• Minutes shall be recorded in books Maintained for that purpose • The pages of the Minutes Books shall be consequently numbered Entry in Minutes Book • Minutes shall be entered in the Minutes Book within 30 Days from the date of conclusion of Meeting • The date of entry in Minutes Book shall be recorded by the Company Secretary or by any other authorized person by Board. • Minutes once entered shall not be altered, except by way of clear approval of the Board at its subsequent meeting in which such minutes are sought to be altered Signing & Dating Minutes of the Meeting shall be signed and dated by: a. Chairman of the same Meeting before the next Meeting b. Chairman of the Next Meeting at the Next Meeting In case of electronic Meeting chairman shall sign digitally Circulation of Minutes Signed Minutes certified by CS / Director, shall be Circulated to all directors within 15 days after these are signed. |
IV. Compliances in general (related to Meeting)
Secretarial Standard-1 prescribed, manner for convening, conducting, constitution for Board Meeting and Meetings of Committee(s), and other related provisions. Till now we discussed specific compliance related with each meeting now we will discuss some general requirements enunciated by the SS-1 related with Meetings of Board & Committee. These are given as below:
A. Frequency of Meeting
For Board Meeting:
i. Board shall meet at least ONCE in every Calendar Quarter
ii. At least FOUR such meetings in every Calendar Year
iii. Maximum time gap / interval allowed between two consecutive meeting, shall not be exceed more than 120 Days
iv. First Board Meeting shall be held within 30 days of its incorporation.
v. For OPC/ Small Company/ Dormant Company, one Board meeting in each half of a Calendar Year, with a minimum time gap of 90 Days
For Committee Meeting:
i. Meetings of Various Committee(s) of Board shall be held as and when required, subject to the minimum number & frequency as prescribed by the Board/Any Law/ Authority.
Independent Director Meeting:
i. If Company is under the obligation to appoint ID then in such case, Independent Directors shall meet at least once in a Calendar Year.
B. Maintenance, Preservation, Custody & inspection
Requirement for Maintenance, Preservation, Custody & inspection of various Meeting Related Documents can be summarized as below:
| Attendance Register | Minutes Book | |
| Maintenance | • At Registered Office
• Any other place as approved by the Board |
• At Registered Office
• Any other place as approved by the Board |
| Preservation | • The Attendance Register shall be preserved for a period of at least Eight financial years and may be destroyed thereafter with the approval of the Board | • The Minutes of the Meeting shall be preserved Permanently in physical or electronic form with Timestamp
• Minutes of all meetings of the transferor company shall also be preserved Permanently by the transferee company |
| Custody | • The Attendance Register shall be kept in the safe custody of Company Secretary
• Where there is no Company Secretary any other person authorized by Board in this behalf. |
• The Minutes Book shall be kept in the safe custody of Company Secretary
• Where there is no Company Secretary any other person authorized by Board in this behalf. |
| Inspection | • Open for inspection by all Directors
• May also be inspect by Appointed PCS/Secretarial Auditor / Statutory Auditor Members of the Company are not entitled to inspect the Attendance Register of the Meeting |
• The Minutes of the Board Meeting & Committee Meeting can be inspect by all Directors
• By Ex-Director for meetings held during his / her tenure as director • May also be inspect by Appointed PCS/Secretarial Auditor / Statutory Auditor / Cost Auditors / Internal Auditors • Inspection may be provided in physical or electronic form Members of the Company are not entitled to inspect the Minutes of the Meeting of the Board |
Office Copies of Notices, Agenda, Notes on Agenda
i. Office Copies of Notices, Agenda, Notes on Agenda and other related papers shall be preserved in good order in physical or electronic from for as long as they remain current or Eight Financial Year whichever is later.
ii. May be destroyed thereafter with the approval of Board
iii. Transferee Company shall also observe these requirements for transferor Company documents handed over to it.
C. Disclosure requirements
The Annual Report and Annual Return of a Company shall disclose the number and dates of Meetings of the Board and Committee(s) held during the financial year indicating the number of Meetings attended by each Director.
D. Resolution through Circulation
i. SS-1 also prescribed provisions regarding Passing of Resolution through Circulation to transact urgent business/ Matters.
ii. Complete compliance(s)/ procedure have been given under SS-1 for Passing Resolution through Circulation.
iii. Certain business items as given at Annexure-‘A’ shall not be available for Passing of Resolution through Circulation and shall be placed before the Board Meeting.
iv. Passing of Resolution by Circulation shall be considered valid as if it had been passed at a duly convened Meeting of the Board.
tyagi sir pls. check Draft Minutes must be prepared & circulated within 15 Days from the date of conclusion of Meeting to all the members of the Board or to the Committee members in case of Committee Meeting. – See more at: https://taxguru.in/income-tax/secretarial-standard1-compliances-meetings-board-directors.html#pcomments and Circulation of Minutes
Signed Minutes certified by CS / Director, shall be Circulated to all directors within 15 days after these are signed.
both are compulsory !
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