In this article we shall understand the purpose and importance of maintaining minutes of meetings with private companies and the regulations applicable therein.

Introduction

There are many advantages to operating your business as a private limited company. But everything comes at a cost. The advantage of privacy and autonomy come along with strict due diligence, scrutiny and corporate governance. This includes mandatory notification of what happens during board meetings and shareholder meetings. And the medium through which the Ministry Of Corporate Affairs keeps track of these meetings is through the Maintenance Of Minutes For Private Companies.

Minutes are nothing but formal notes of a particular meeting or an official hearing in a company. They are also called protocols. These minutes are a written record of all official and influential gatherings of a company. Minutes are a brief account of all the happenings and the attendees of the gathering. It is usually the company secretary, in general, who is responsible for maintenance of the minutes.

Maintaining The Minutes

A register called the Book of Minutes is maintained to record all these minutes (usually records important meetings like board meetings and other influential events). Minutes are to be maintained properly and they are to be signed by the chairman of the company. A concerning authority reviews these minutes. These are to be maintained by following certain guidelines as per the provisions of the Companies Act. Given below are points on how to manage the minutes of your company.

The minutes have to be recorded in a book. A separate book has to be maintained for the Board meetings and related Committees.
Minutes must be maintained in either electronic or physical form with Timestamp.
Minutes may be maintained in loose-leaf form but they must be bounded regularly.
The recording must be done systematically. General content is mentioned first and then the specific content is mentioned.
The minutes must be recorded according to the proceedings of the meeting and must be very accurate. The minutes are to be written in past tense and in a third person form. Nonetheless, resolutions are recorded in present tense.
After a proper recording, the minutes are circulated amongst all the directors in a span of fifteen days. The Directors are allowed to make their comments. Then these comments are recorded in the minute’s book in a span of seven days from the circulation.
The date of entry, as well as the date of the meeting, must be recorded before recording any other data. Furthermore, the Company Secretary makes all the recording. The company, however, may appoint someone else in case of the absence of the CS.
The minutes are to be signed by the Chairman of the specific or the next meeting along with the date and the place. If minutes are recorded electronically, then digital signing is to be done.
The inspection of minutes by any Director, Auditor or Company Secretary of the Company is allowed.

Content Of The Maintenance of the Minutes

Content of the Minutes are divided into two parts: General and Specific contents.

General Contents

The general contents include the following:

The beginning of the minutes will state the following:

The serial number
Type of the meeting
Name of the company
The day, date, venue and the time of commencement of meeting
The conclusion of the meeting

2. Person Presents:

The names of the directors present physically
The names of the directors present through the electronic mode
Company Secretary who is in attendance at the meeting
Invitees, if any, (this includes Invitees for specific items)

Note:

Names of the directors starting with the name of the person in the Chair.

Names of the Directors must be listed in alphabetical order but name of Chair at first.

Name of invitees in the capacity in which an Invitee attends the Meeting.

In case of an invitee attending on behalf of an entity, the name of the entity such Invitee represents and the relation, if any, of that entity to the company must also be recorded

Specific Contents

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

Record of Election of Chairman of Meeting:

If there is a 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 a Chairman but he is absent then the directors must appoint any person from themselves as Chairman of the Meeting.

2. Granting of Leave of Absence:

If a director is absent and is given leave of absence to Company, the Chairman will record the Leave of Absence. The Company must receive a Letter of “Leave of Absence “from the absent director.

3. Record Mode of Attendance of Director:

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

4. Record presence of quorum:

The Chairman will check the quorum and record the quorum.

5. Record Details of the Director present through video conferencing:

If any director participates through video conferencing then the Chairman will record the following: His particulars, his location and the Agenda items in which he participated. This is done by roll call. The Chairman will take a roll call of directors present through video commencing.

6. Noting of the Minutes of the preceding Meeting:

In the Board Meeting, the company will take note of the maintenance of the minutes of the last board Meeting by circulation of the signed copy of minutes to all the present directors.

7. Noting the Minutes of the Meetings of the Committees:

If any committee is merged by the Company, then in the board meeting of the Director Company will take note of the minutes of the Committee Meeting.

8. Noting of resolution passed by the circulation:

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

9. If any Director participates only for only a part of the Meeting, the Agenda items in which he did not participate:

If a director is interested in any resolution, then at the time of passing of that resolution mention about the interest of that director.

Conclusion

Besides maintaining the minutes of the meeting, there are several other such regulations and formalities that a company has to adhere to in the name of corporate governance. Given that a company allows the management to be divorced from the ownership of the company, the government needs to put provisions in place to protect the interest of the investors or owners as they are not the ones running the company but at the same time the functioning of the company affects them directly. If you want any more information with regards to the other formalities and regulations with regards to company, then get in touch with us so we can connect you to our team of experts who will address any query you may have and help you out with your requirements.

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