Provisions Regarding Maintenance of Minutes of Board Meetings and General Meeting under Companies Act, 2013

The 'Minutes Book' is an extremely important document for any company as it is a record of the meetings of the Board of Directors as well as the Extraordinary General Meetings that have taken place in the company. It contains the details of the resolutions passed and the decisions taken in these meetings. 

Section 118 of the Companies Act, 2013 

This Section deals with the Minutes of Proceedings of General Meeting, Meeting of the Board of Directors and Other Meeting and Resolutions Passed by Postal Ballot.

A detailed breakdown of the section is as follows:

Duty of the Company to prepare, sign and maintain Minutes

According to this Section, it shall be the duty of every company to prepare, sign and maintain the following minutes:

• every General Meeting of any class of shareholders or creditors
• every resolution passed by postal ballot
• every meeting of the Board of Directors
• every meeting of every committee of the Board

These minutes shall be prepared, signed and maintained within 30 days of the conclusion of every such meeting concerned, in books kept for such purpose, with their pages consecutively numbered.

All appointments in any of the meetings aforesaid shall be recorded in the minutes.

In addition to the above, it shall be the duty of every company to observe Secretarial Standards with respect to general and Board Meetings, specified by the ICSI and approved as such by the Central Government.

Special Compliance in case of Board Meetings

In case of a Board Meeting or the meeting of a committee of the Board, the minutes shall also contain:

• names of the Directors present at the meeting
• in case of a resolution passed at the meeting, the names of the directors, if any, dissenting from or not concurring with the resolution

Power of the Chairman of the Meeting

If the Chairman of the meeting is of the opinion that any matter:

• is or could reasonably be regarded as defamatory of any person or
• is irrelevant or immaterial to the proceedings or
• is detrimental to the interests of the company

then such a matter shall not be included in the minutes. The Chairman has the power to exercise absolute discretion with regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified above.

Evidentiary Value of the Minutes

The minutes of the meeting shall contain their 'fair and correct' summary. When such minutes are kept in accordance with the provisions of Section 118, they are evidence of the proceedings recorded therein. When the minutes have been kept in such manner, following are the results, until the contrary is proved:

• the meetings shall be deemed to be duly called and held
• all the proceedings shall be deemed to have taken place
• the resolutions passed by postal ballot shall be deemed to be duly passed
• all appointments of Directors, Key Managerial Personnel, Auditors or Company Secretary in Practice, shall be deemed to be valid.

Non-Compliant Minutes not to be circulated or advertised

Minutes of the general meeting of a company, which are non-compliant with the provisions of this Section, shall not be circulated or advertised at the company's expense, unless they are made compliant.  

Penalty for contravention

The penalty for non-compliance of the provisions of this Section in respect of any meeting is Rs. 25,000/- for the Company and Rs. 5,000/- for every officer of the Company who is in default. 

Penalty for tampering with Minutes

If a person is found guilty of tampering with the minutes of the meeting, he shall be punishable with imprisonment for a term which may extend to 2 years and with fine which shall not be less than Rs. 25,000/- but which may extend to Rs. 1,00,000/-.

Exception to Section 118

This Section shall not apply to a Section 8 Company as a whole except that minutes may be recorded within 30 days of the conclusion of every meeting in case of companies where the articles of association provide for confirmation of minutes by circulation.

Rules 25 of the Companies (Management and Administration) Rules, 2014

A detailed break down of the Rule is as follows:

Distinct Minute books to be maintained

A distinct minute book shall be maintained for each type of the meeting namely:

• General Meetings of the members
• Meetings of the Creditors
• Meetings of the Board and
• Meetings of the Committees of the Board

The minutes of the proceedings of each meeting shall be entered in the books maintained for that purpose along with the date of such entry within 30 days of the conclusion of the meeting. 

Each page of Minutes Book to be initialed or signed

Each page of every such minutes book shall be initialed or signed and the last page of the record of proceedings of each meeting or each report in such minutes book shall be dated and signed by:

• in case of minutes of Board Meeting or Committees of the Board - by the chairman of the said meeting or the chairman of the next succeeding meeting
• in case of minutes of General Meeting - by the Chairman of the said meeting within the aforesaid period of 30 days. In the event of death or inability of that Chairman within that period, the minutes shall be initialed or signed by a Director duly authorized by the Board for such purpose.
• in case of every Postal Ballot resolution - by the Chairman of the Board within 30 days. In case there is no Chairman or in the case of death or inability of that Chairman, by a Director duly authorized by the Board for such purpose. 

Compliances in respect of Postal Ballot  

In case of every resolution passed by Postal Ballot, the following details shall be entered in the minutes book of general meetings along with the date of such entry within 30 days from the date of passing such resolution:

• brief report on the postal ballot conducted
• details of the resolution proposed
• result of the voting
• summary of the scrutinizer's report

Permanent Preservation of Minutes Books

Minutes of General Meetings: These shall be kept at the registered office of the Company and shall be preserved permanently and kept in the custody of the Company Secretary or any director duly authorized by the Board.

Minutes of Extraordinary General Meetings: These shall be preserved permanently and kept in the custody of the Company Secretary of the company or any Director duly authorized by the Board for the purpose and shall be kept in the registered office or such place as the Board may decide.

Guidelines for Preservation of Minutes and other Records under Secretarial Standards [Para 8 of SS-1 and Para 18 of SS-2]

The Secretarial Standards provide the following guidelines for the preservation of minutes and other records:

• Minutes of all meetings shall be preserved permanently in physical or in electronic form with timestamp
• office copies of notices, agenda, notes on agenda and other related papers shall be preserved in order in physical or in electronic form for as long as they remain current or for 8 financial years, whichever is later and may be destroyed later with the approval of the Board.

          in case of merger or amalgamation of one company with the other:

• in case of merger or amalgamation of one company with another, the minutes of all meetings of the transferor company shall be preserved permanently by the transferee company, notwithstanding that the transferor company might have been dissolved.
• office copies of notices, agenda, notes on agenda and other related papers of the transferor company shall be preserved in order in physical or in electronic form for as long as they remain current or for 8 financial years, whichever is later and may be destroyed later with the approval of the Board and permission of the Central Government, wherever applicable.