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What is the Importance of Minutes of Board Meeting

If you are running a company, then you should keep records of minutes of the board meeting. All the decisions of the board meeting are recorded in minutes of the board meeting. It is the legal record which must be maintained for future references. As per the Companies Act, 2013, it is mandatory for every company to maintain minutes of all the board meetings.

In this blog, we will help you to know about minutes of board meetings.

What are Minutes of Board Meeting?

Minutes of board meetings are the official record of the proceedings of a meeting.  It must contain the summary of the meetings and must disclose all the discussions and decisions taken at that meeting. Minutes of the board meeting is also considered as the corporate documents. It must be kept in accordance with the Companies Act, 2013^[1].

Importance of Minutes of Board Meeting

It is necessary for a company to record minutes of the board meeting. Where a company maintains a record of minutes of board meetings, then the members of the company who are absent in the meeting become eligible to get all the details of the board meeting conducted. Following are some of the important points relating to the record of minutes of the board meeting:

• Minutes of meeting offer legal protection to any organization
• It provides open communication to those persons and interested persons who were neither attended nor were invited to join the meeting.
• Many people are not able to remember all the things at a time, so a record of minutes of board meeting help them for future references.,
• Minutes of the meeting note down the list of the persons attended and remained absent in the meeting.
• In a minutes book, important points discussed in the meeting are mentioned.

What is included in the Minutes of the Board Meeting?

Minutes of board meeting book includes the following components such as:

• Name of the Organization
• Date and time of the meeting
• Results of the Vote
• Name of the person absent in the meeting
• Brief of the decision as well as discussion
• Time and date of the next meeting
• Ending time of the meeting

Inspection of the minutes book

The minutes book must be kept at the registered office of the company. The minutes book must be open for inspection without any charge during the working hours of the company. As per The Companies Act, 2013, only there is a limit of two hours for such inspection.

Persons authorized to inspect the minutes book

As per the rules and regulations of the Companies Act, 2013, certain persons get authorization to inspect the minutes book. List of the authorized person is given below:

• Directors of the company
• Company Secretary
• Secretarial Auditor
• Company’s Internal Auditor
• Statutory Auditor

However, the Directors of the company are the main authority to inspect the minutes book.

How to prepare minutes of the meeting?

After successful completion of the meeting of a company,  it is necessary to prepare minutes of the meeting. Following are the steps to prepare minutess of the meeting:

Creation of template

Firstly, the authorized person/Company secretary need to create a template for recording minutes of the meeting which must include:

1. Date and time of the meeting
2. Purpose of the meeting
3. Decision made

Recording of the meeting

In this step, it is necessary that :

1. After all the proceedings of the meeting are recorded, and Company secretary shall inform this to everyone present at the meeting
2. Company secretary has to check that all attendees are present in the board meeting
3. Company secretary also need to record all the note in the template

Review the notes

After completion of the meeting, it is necessary for the Company Secretary to review the notes thoroughly. The Director will review all the prepared documents and notes. After documents reviewed by the Director person Company secretary will send it to all the members participated in the meeting. However, Company secretary can send it through the mail or by giving hard copies of the minutes to all the participants.

Note,  the prepared minutes books will be preserved permanently.

Guidelines for preparing Minutes of the Meeting

Before preparing minutes of the meeting the Company Secretary has to keep in mind the guidelines provided by The Companies in this regard. The minutes must be written in a simple and concise language.  The minutes will be written in the past tense. However, Company secretary has to write the resolutions of the minutes in the present tense.  It is mandatory to maintain the minutes of the meeting in proper order.

Applicability of Provision for preparation of Minutes Book

Certain provisions are contained under the below rules and regulations which are applicable when a minute book is prepared. These are:

• Section 118 of the Companies Act,2013
• Rule25 of the Companies Rules,2014
• Secretarial Standard-1 issued by the Institute of Company Secretary of India

What is the time limit to make an entry in the minutes book?

There is a specific provision in the Companies Act with regard to restriction on the period of time for making an entry in minutes books. As per the Companies Act, 2013, the Company Secretary must within thirty days from the conclusion of the board meetings has to enter minutes in the minutes’ book.

In case the meeting gets adjourned, then the minutes of both original and adjourned meeting must be entered in the minutes’s book. It must be done within thirty days from the beginning of any of the meeting.

Custody of Minutes Book

For safety purpose, the minutes book has to be kept in the custody of Company Secretary.

In absence of company secretary, any director as authorized by the board.

Legal aspects of the minutes of the board meeting

As discussed above, the minutes of the meeting are the legal records of a company. In the future, if any question is raised with regard to the legal liability of the meeting already conducted, then the minute’s book can be used as evidence in court. If in a minutes book, proper information is mentioned, then it will be helpful for the company members at the time of legal review.

Key Judgements of the Minutes of Board Meeting

Conclusion

Minutes of the meeting is treated as an official record of the meeting of any company or organization. Minutes of any meeting provides legal protection to any company. The Minutes of the meeting will enable every company members to get an update about every board meeting. In case those company members who are neither participated nor invited to the company meeting, they will get help from the minutes of the meeting.

For more information, you can contact Enterslice.