A Company is an official entity that involves formal transactions. Every gathering, communication, or transaction which has the potential to affect any interest of the members shall be recorded. These records achievements help in tracking the developments and changes in the functioning of the business.
The notes or recommendations recorded during such meetings of the company are Meeting Minutes. They include extracts of the conversations made during the gathering of the company. In formal environments, meeting notations are reserved to provide a record of the conversation to refer them in the future.
Minutes are an official recording of the proceedings of a Board Meeting or Annual General Meeting or any other meeting and the business transacted at the Meeting. All companies registered in India are required to maintain Minutes of all Board and Committee Meetings in a Minutes Book. In this article, we look at the procedure for recording minutes of meeting and minutes of meeting format under the Companies Act, 2013.
What is Minutes of Meeting?
Minutes of meeting is an official record of the proceedings of a meeting. Minutes help in understanding the deliberations and decisions taken at the Meeting. There is no restriction format or language for recording Minutes of meeting.
Minutes kept in accordance with the provisions of the Companies Act can serve as evidence in Court of Law. For example, the only way to prove that a Board Resolution was passed at the Board Meeting of the company is by producing the Minutes Book in which the particular Resolution was recorded before the Court.
Minutes are recorded whenever the officials associated with a company gather for an executive meeting. The moments are noted as a formal archive of the meeting by way of casual notes and conventions. In simple terms, all the instances of the meeting which include any information of formal and mutual nature and is relevant to the gathering or hearing, as the case may be, are minutes of the meeting.
Minutes are formally written records of the proceedings of a Meeting which are kept in a physical or electronic format. They are also known as MoM (Minutes of Meeting) and include all the informally taken notes by following protocols formally and instantly recording the meeting or hearing in a written format. This procedure helps in describing the events that took place at the meeting and may include a list of statements of the raised issues, a list of attendees/participants, considerations and responses by the participants, and lastly the relevant decisions over the issues.
Minutes Book
Minutes of meeting should be kept in a minutes book maintained for that purpose at the registered office of the company or at a place approved by the Board of Directors. The law prohibits pasting of Minutes in the Minutes Book and hence Minutes cannot be type-written and then pasted in bound Minutes Book or in loose leaves. Minutes should also not be printed on a piece of paper, whether on letter-head or any other paper, and pasted in the Minutes Book. It is with a view to maintaining the integrity and evidentiary value of Minutes. If minutes book is maintained in loose-leaf form, it should be bound periodically depending on the size and volume and coinciding with one or more financial years of the company.
Courts have invalidated Board Meetings in the past when minutes are not recorded in a proper book as per Companies Act, 2013. Hence, a minutes book should be distinctly kept and maintained for different meetings such as Meetings of the Board and Meetings of various Committees of the Board.
Minutes of Meeting Format
Minutes of meeting should state the serial number and type of the Meeting, name of the company, day, date, venue and time of commencement of the Meeting. In addition, a minutes of meeting must also specify the following:
Details of Participants-In case of minutes of meeting of a company, the name(s) of Directors present and their mode of attendance must be mentioned. If all Directors are present physically, the Minutes need not specially record the mode of attendance. However, the Minutes should record the mode of attendance if any Director is participating through video conference or other electronic method along with the location from which he/she is participating from.
In case a Company Secretary is participating, then the details of Company Secretary must be mentioned. The minutes must record details of any other person who is in attendance and invitees. Finally, the minutes of meeting must record the names of Directors who sought and were granted leave of absence.
Election & Quorum-The minutes of meeting must contain a record of election of the Chairman of the Meeting, if applicable. Further, it should also contain details of presence of Quorum. If at the commencement of the Meeting, Quorum is present, but subsequently any Director leaves before the close of the Meeting due to which the Quorum requirement is not met for businesses taken up thereafter, then the Meeting should be adjourned and a statement to that effect should be recorded in the Minutes.
Details of Resolution Passed-The minutes of meeting should contain the text of the Resolution(s) passed by circulation since the last Meeting, including dissent or abstention, if any. If any Director on the Board dissents or abstains from voting on any of the Resolution passed by circulation, then such dissent or abstention should be recorded in the Minutes of Meeting.
Details of Dissent & Views of Independent Directors-The views of a Director or an Independent Director must be mentioned in the minutes of meeting, especially if insisted upon by a Director or any other person in the meeting.
Further, the fact of dissent and the name of the Director who dissented from the Resolution or abstained from voting on a resolution must be mentioned in the minutes of meeting.
Related Party Transactions-In case of a private limited company, the Minutes of Meeting should record the fact that an interested Director after disclosure of his interest participated in the discussion and voted.
If a Director did not participate in the discussions and did not vote on item of business in which he was interested and in case of related party transaction, then such information must also be recorded in the minutes.
Miscellaneous Items-Consideration of any item other than those included in the Agenda with the consent of majority of the Directors present at the Meeting and ratification of the decision taken in respect of such item by a majority of Directors of the company Minutes should be mentioned in the minutes.
Thanks & Closing of the Meeting-If any thanks are to be mentioned, it can be provided before the closing. Finally, the time of commencement and conclusion of the Meeting should be recorded in the minutes.
Provisions Applicable as per Companies Act, 2013
The concept of Meeting Minutes is dealt with by the virtue of the following provisions:
- Section 118 of the Companies Act, 2013– “Minutes of proceedings of General Meeting of Board of Directors and resolutions passed”- The sub-section (1) of Section 118 of the Companies Act, 2013 provides that every company shall record minutes of the general meeting’s proceedings. Such meetings shall be of any class of creditors or the shareholders of the company. Every resolution shall be passed by a postal ballot and every meeting; either of its Board of Directors or of every committee of the Board shall be signed and prepared in the manner prescribed.
A separate book for meeting minutes shall be maintained for each meeting such as:
- General Meetings (Members),
- Board Meeting (Directors),
- Meetings of each Committee of the Board, or
- Meetings of the Creditors
Rule 25 of the Companies Management and Administration Rules, 2014
“General Meeting proceeding Minutes of Board of Directors and the resolutions passed by postal ballot method”- Rule 25 of the Companies Rules states that minutes of each proceeding following concerned meetings shall be recorded and maintained in written Format. The specified Rule enhances the provision envisaged under section 118 of the Companies Act, 2013, and re-clarifies the terms and conditions relevant to recording the Meeting Minutes. The formal terms so listed can be looked into brevity as follows;
- Duration of Recording– Within thirty days of the conclusion of the meeting, the minutes of the concerned meeting shall be recorded in the book specifically maintained for that reason,
- Resolution Report Summary– A brief report of the summary of the report the reviewer shall be prepared whenever a resolution is passed by postal ballot with the date of passing of such resolution annexed to it. The purpose of keeping a summary report of resolution is to capture the issues, considerations, and decisions of them the concerned participants for reference in the future.
- Venue of Meetings- Such meetings of the company provisionally shall always be kept at the registered office or as an exemption at the place where the board may decide. The venue of the meetings is important from the perspective to keep track of the company’s formal affairs and custody of the books of meeting minutes preserved safely.
- Custody of Records- Apart from the venue, the provisions also provide a place of custody with the authority of which the minute books are to be preserved. The custody shall be with the Company Secretary or any other authorized director that is duly decided by the concerned board.
Other similar legislations that can trace the concept of Meeting Minutes can be observed in these two specific standards which are more or less similar to the above-mentioned provisions;
- Secretarial Standard SS-1: “Meetings of the Board of Directors”
- Secretarial Standard SS-2: “General Meeting”
Importance of Meeting Minutes
- Structure – Minutes of a Meeting provides a platform for the brief outline of the issues, the noteworthy actions that are expected to be taken, and thereafter setting a structure for future reference. This procedure establishes a foundation for the track of issues and steps necessary for the development of the Company.
- Results– Another important aspect of the Meeting Minute procedure is result driven approach of the organization. Not only do these notes help in tracking the progress of the organization to meet its expectations but also allow leaders and members to come forward with recommendations over specific tasks.
- Transparency – After the conclusion of the gathering, these notes help in creating a transparent space for every member, participant, and individual concerned regarding the issues, recommendations, inclination of the members, and the current track of the company. In short, it provides an analysis to compare between present scenario and the expected scenario for the working of the company.
Procedure to Record Meeting Minutes Effectively
Pre-planning (Before the Meeting) – An agenda of the meeting must be created before the meeting starts to give a structure to the meeting and to provide the organization with an outline for crafting the expected meeting minutes and notes. This helps in staying on track and ensures that all the participants are prepared for the session. In addition to an agenda, the meeting minutes must be pre-filled with the appropriate information like the date of the meeting, location, time, issues to be raised, list of participants, and other necessary details that are known to the organization. This step saves time during the session.
Recording and Noting down the Minutes (During the Meeting) –Meeting minutes don’t need to have a record of all the information that was transacted during the meeting. Only important things need to be covered in a clear and concise format. The focus must be on capturing the issues raised and decisions made thereafter. However, if a particular issue triggers the debate it must be noted with the argument raised by each side and the final decision that was arrived at.
Circulation of Minutes and Storing Minutes for future reference (After the Meeting) – Once the Meeting concludes the notes and recommendations must be circulated to each participant for their signature. The purpose of circulating and taking signatures is to make each concerned member aware of the list of record for their acknowledgment on it. After which the notes are preserved and referred to in the future to compare if the expected recommendations have finally arrived at the desired conclusion.
What not to include in Meeting Minutes?
The provision expressly reflects that the following must not be included in the Meeting Minutes;
- Reasonably defamatory content,
- Irrelevant or immaterial content to the proceeding, or
- Anything that is detrimental to the Company’s interest
Penalty
The company shall be liable to pay a penalty of 25,000/- Rs. in case of any default in complying with the provisions of the mentioned section in respect of any of the meetings. And every officer who is found to be in default shall be liable to attract a penalty of 5,000/- Rs.
Apart from it if a person is found guilty of the offense of tampering with the Minutes, in such case they shall be punishable with imprisonment for a term of 2 years with a fine that can be anywhere between 25,000/- Rs. to 1,00,000/- Rs. as per the discretion of the authority.
FAQs
Q: Can Minutes of Meeting be amended or corrected?
Yes, if errors or omissions are identified, the minutes can be amended or corrected in a subsequent meeting. It’s important to maintain accuracy in the records.
Q: What is the difference between agenda and minutes?
An agenda outlines the topics to be discussed in a meeting, while minutes document what actually transpired during the meeting, including discussions, decisions, and action items.
Q: How detailed should Minutes of Meeting be?
Minutes should be detailed enough to capture the key points and decisions made during the meeting but not overly verbose. They should focus on essential information and actions.
Q: Why are Minutes of Meeting important?
MoM serve as an official record of what transpired during a meeting, providing a reference for attendees and a historical record for future reference. They also help in tracking action items and ensuring accountability.
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