It is mandatory for companies to maintain minutes of both board meetings and general meetings.
The maintenance of minutes is an essential task for every company under the Companies Act of 2013.These minutes must be recorded in a book kept for that purpose and signed by the chairman of the meeting or by the chairman of the next meeting. The minutes must also be recorded in the minutes book within 30 days of the meeting.
Compliance with the law: Companies are required by the Companies Act, 2013 to keep minutes of all meetings. Failure to comply can lead to penalties and legal consequences.
Evidence in legal proceedings: Minutes serve as evidence in legal proceedings, providing a record of the company's decisions and actions.
Transparency: Minutes ensure transparency in the company's decision-making process, allowing shareholders and stakeholders to understand the company's actions and decisions.
Governance and accountability: Minutes play a crucial role in corporate governance and accountability, ensuring that decisions are made within the framework of the law and the company's articles of association.
Reference for future meetings: Minutes can be used as a reference for future meetings, providing a record of past discussions and decisions to inform future decision-making.
Protection of directors and officers: In legal proceedings, minutes can protect directors and officers by demonstrating that decisions were made in good faith and in the best interests of the company.
When recording minutes, the meeting is conducted by the company secretary or any other person authorized by the board. The minutes should contain a true and correct summary of the proceedings, written in clear and concise language.
The date, time, and venue of the meeting
Names of the directors/committee members/shareholders present
Names of the absent members
Approval of previous minutes
Matters discussed and decisions made
Any dissents expressed
Details of voting and the outcome of any vote
Any action items or follow-up tasks assigned
Signature of the chairman of the meeting
After the meeting, the drafted minutes are circulated to directors or committee members within 15 days for comments. They will communicate their opinions regarding the minutes in writing within seven days from the date of distribution. If no comments are received within the specified timeframe, it is considered that the minutes have been approved.
The company will be fined twenty-five thousand rupees and the officers who are in default shall be fined five thousand rupees.
When a person is guilty of tampering with the minutes, he shall be punished with imprisonment for a term which may extend to two years and with a fine of twenty-five thousand rupees and extend up to one lakh rupees.
Overall, maintaining minutes is essential for legal compliance, transparency, accountability, and providing a record of the company's decision-making process