Maintenance Of Minutes for Private Companies

Maintenance Of Minutes for Private Companies

Every Private Company incorporated in India is required to maintain statutory registers and records which can be maintained online and/or electronically. The statutory register and records are kept at the company’s registered office and the directors, members of the company and any other person can inspect certain registers and records of the company. This includes mandatory notification of the happenings during the board meetings and shareholder meetings.

These records, registers of the proceedings of a meeting, contain a fair and correct summary of the proceedings of the meeting. The minutes are supposed to spell out why, how, and what decisions or conclusions were taken at the meeting about each agenda transacted during the meeting.

Any company – private, public listed, or unlisted, all are incorporated under the provisions of the Companies Act. Hence, all these entities are guided by the same provisions of the Companies Act under which they are incorporated right from formation to closing of business.

The minutes in a company are also governed by the provisions of The Companies Act 2013 as these minutes are proof of the happenings of a specific event in the organisation. Whenever a company’s documents are called for, the first and foremost thing demanded by any department is its minutes as they show the proceedings of the board / general meetings.

Every private company is required to maintain the minutes of all meetings – i.e. board meetings, various committee meetings (audit committee, nomination and remuneration committee, corporate social responsibility committee, stakeholders relationship committee, asset liability management committee etc) and general meetings i.e. annual general meeting, extraordinary general meeting, the court convened shareholders/creditors meeting etc.

These minutes maintained by any private company are an official and legal record of the proceedings of meetings and the minutes are presumed to be correct and could be used as legal evidence in any legal proceedings as they represent the facts of the happenings of any particular meeting.

Maintenance of the Minutes

The maintenance of minutes refers to the process of recording and preserving accurate and organized minutes of a meeting. Minutes serve as an official record of the proceedings and decisions made during a meeting. Here are some guidelines for effectively maintaining the minutes:

  1. Prepare before the meeting: Familiarize yourself with the agenda and any relevant documents or background information. This will help you understand the topics discussed and capture accurate information.

  2. Attend the meeting: Be present during the meeting to record the minutes in real time. Pay close attention to the discussions, decisions, and actions taken by participants.

  3. Use a structured format: Create a consistent and organized format for your minutes. Include the meeting’s date, time, location, and list of attendees. Use headings or sections to categorize the different agenda items discussed.

  4. Record key points: Capture the main points discussed during the meeting. Focus on decisions made, action items assigned, and any significant discussions or outcomes. Avoid unnecessary details and keep the minutes concise and relevant.

  5. Use clear and objective language: Write the minutes in a clear and concise manner. Use objective language, avoiding personal opinions or biases. Be accurate and avoid misrepresenting what was discussed or decided.

  6. Assign responsibilities: Note any action items or tasks assigned during the meeting, along with the responsible person and deadline. This will help track progress and follow-up on pending items.

  7. Proofread and finalize: After the meeting, review and proofread the minutes to ensure accuracy and clarity. Correct any errors or omissions. Once finalized, distribute the minutes to the participants and any other relevant stakeholders.

  8. Maintain a record: Keep a well-organized record of the minutes, either in physical or digital form. Create a filing system or use a document management tool to store and retrieve minutes easily when needed.

  9. Follow up on action items: Track the progress of action items and provide updates in subsequent meetings. Include any relevant updates or resolutions related to previous meeting discussions.

  10. Ensure confidentiality and security: Treat the minutes with confidentiality, especially when discussing sensitive information. Implement appropriate security measures to protect the minutes from unauthorized access or disclosure.

Below mentioned are a few pointers on how to manage the minutes of any private company:

  • The Company Secretary is the one who records all the minutes of a meeting. However, the company can appoint a different person in case of the absence of the CS.
  • The minutes must be recorded in a separate book which must be maintained for the Board meetings and related Committees.
  • Minutes can be maintained in either electronic and/or physical form with relevant timestamps.
  • Minutes can be maintained in loose-leaf form but must be bounded regularly.
  • Minutes should be recorded systematically with the general content mentioned first which should be followed then with the specific meeting-based content.
  • The minutes should be recorded as per the proceedings of the meeting and must be very accurate. The minutes are to be written in past tense and a third-person form.
  • After a proper recording, the minutes must be circulated amongst all the directors in a span of fifteen days who are then allowed to make their comments.
  • Then these comments are supposed to be recorded in the minute’s book in a span of seven days from the day of circulation.
  • The Chairman of the specific or the next meeting is supposed to sign the minutes along with the date and the place
  • Any Director, Auditor or Company Secretary of the Company is allowed to inspect the minutes.

Content of the Maintenance of the Minutes

The content of the Minutes is divided into two parts– General and Specific content.

  • General Contents
    The beginning of the minutes will state the following:
    – The serial number
    – Type of the meeting
    – Company’s name
    – Day, date, venue, and time of commencement of the meeting
    – Meeting’s conclusion

    Person Presents:
    – The directors names present physically
    – Name of the directors who were present via virtual mode
    – CS attending the meeting

  • Specific Contents
    Once the general content is mentioned, the specific content should be mentioned as given below
    – If the Chairman of the Board is present for the meeting, then he/she will be the Chairman of the Board Meeting. If there is no Chairman of the Board or any other Chairman present at the meeting, the directors then have to appoint any individual among themselves as Chairman of the Meeting.
    – If a director is absent and is given leave of absence from the Company, the Chairman will record the Leave of Absence. The Company should get a Letter of “Leave of Absence“ from the absent director.
    – The Chairman has to record the presence of the director along with the mode of presence i.e., Physical or virtual.
    – If any director participates via video conference, the Chairman must record the following – the location, and agenda in which he/she participated.
    – In a board meeting, the company must take note of the maintenance of the minutes of the last board Meeting by circulating a signed copy of the minutes to all the present directors.
    – If the company passes any circular resolution, then the company must take note of such resolutions in the upcoming minutes.

Matter not to be included in the minute

The Chairman can exercise absolute discretion regarding the inclusion or non-inclusion of any matter in the minutes on the grounds as specified below

  1. is or could reasonably be regarded as defamation of any person; or
  2. is irrelevant to the proceedings; or
  3. is detrimental to the company’s interests.

Penalty :

If any default is made in complying with the provisions of The Companies Act, 2013 during any meeting, the company is liable to a penalty of ₹25,000 while every officer of the company who is in default are liable to a penalty of ₹5,000.

If any individual is found guilty of tampering with the minutes of the proceedings, he/she can face a jail term which may extend to two years with a fine of ₹25,000-₹100,000.

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