Minutes of meeting means a record of the proceedings of the meeting of directors or Annual General Meeting or any other meeting of the company. it is important to record the proceedings in the form of minutes of the meeting. These minutes are a true and fair reflection of the proceedings of the meeting. The purpose of recording the minutes is to preserve them for future reference and to communicate for implementation. In this article, we learn how to write the minutes of the meeting.
Legal Requirements for Minutes of Meeting
The Companies Act, 2017 requires every company to maintain minutes of meetings of the board of directors and of the general meetings. In addition, a company must also maintain minutes of the meetings of any committee or sub-committee of the board. The minutes include the resolutions, discussions, and decisions on such resolutions.
The law requires every company to maintain minutes of all the meetings in the form of books. It is necessary to maintain the minutes in chronological order, mentioning the meeting number and date. In addition, it must record the venue of the meeting and list of the persons who attended the meeting.
Format of Minutes of Meeting
There is no prescribed format for the minutes of meetings and any convenient format is acceptable. Further, there is no requirement of verbatim transcription. However, the minutes must include all important points appropriately, including any dissenting notes of any director(s). Below is a workable format for recording agenda items and resolutions:
IT WAS PROPOSED that a bank account of the company be opened in a scheduled bank, authorizing CEO and One Director to open and operate that account.
IT WAS UNANIMOUSLY RESOLVED THAT or (IT WAS RESOLVED BY THE MAJORITY WITH DISSENTING NOTE FROM MR. “X” THAT) a current account of the company be opened in ABC Bank. The CEO and Director “A” are hereby authorized to open and operate the account and to all things to complete the formalities.
In addition, it is a good practice to include some important points of discussion in the proposal section. For example, in our case, the reason to choose ABC Bank and the authorization of CEO and one Director is relevant. However, it is not necessary but useful. The above example is specific to the decision of the board of directors in respect of opening a bank account. The same format is useful and valid for any other agenda items. Further, the same format, with necessary changes, is equally valid for proceedings of the general meetings.
It is important to write and maintain the record of the proceedings in simple language. A simple language will make it easy for a reader to understand the intention of the decision-makers. Further, it will help them in implementing the decisions, without any ambiguity or confusion. If the proceedings/minutes are in difficult wording, it may cause confusion and delay in understanding the essence. So for clarity and smooth functioning, it is the best practice to keep the language as simple as possible. However, where necessary use of technical terms is better, as they are sometimes more common than simple words.
Circulation of Draft Minutes
After the conclusion of a meeting, the next step with regards to minutes is to share the Draft Minutes with participants. Every director is entitled to receive draft minutes, within 14 days of the meeting. The directors may suggest changes or give their feedback and for recording any dissenting notes. Once all the directors give their confirmation, the chairman shall sign the original copy, after finalization. The signed minutes are valid to prove the proceedings and the decisions.
Preservation and Sharing of Minutes of Meeting
As required under the Act, a company must preserve the minutes at its registered office in physical form and electronically. A company must maintain a physical record of minutes for at least 10 years. However, a company must maintain the electronic record of minutes on a permanent basis.
It is a good practice to maintain books of minutes in chronological order with an index of the meeting number, and the corresponding dates. This is to help in easily finding a relevant portion, in case one has to refer back to the minutes.
How to Share Extracts of Minutes?
Often, the management of the company and other stakeholders require the decisions of the Board. Whenever such a requirement arises, it is not necessary to share the complete minutes. Only a copy of the extracts of the relevant portions with a certificate of its truthfulness by the Company Secretary or CEO/director, stating “Certified to be True Copy – CTC”, is enough.
Hope this helps you to understand how to record proceedings of meetings in the form of minutes. However, if you have questions or need clarification regarding any specific issues, please feel free to contact us.