Minutes of Proceedings of General
Meeting, Meeting of Board of Directors and Other Meeting and Resolutions passed
by Postal Ballot
By
CS K VINOTH AND CS D HEM SENTHIL RAJ
Under
Section 118 of Companies Act, 2013 every Company is required to cause the
minutes of the proceedings of every:
1. General
Meeting of any class of shareholders or creditors;
2. Resolution
passed by Postal Ballot;
3. Meeting
of Board of Directors or committee of the Board
Maintenance
of Minutes Book:
Minutes of the above said meetings shall be prepared,
signed and maintained in a distinct minute book separately; however the
resolutions passed by postal ballot shall be recorded in the minute book of
general meetings as if it has been deemed to be passed in a general meeting.
The
minutes of proceedings of each meeting shall be entered in the books maintained
for that purpose along with the date of such entry within thirty days of the
conclusion of the meeting.
In case of every resolution passed by postal ballot,
a brief report on the postal ballot conducted including the resolution
proposed, the result of the voting thereon and the summary of the scrutinizer’s
report shall be entered in the minutes book of general meetings along with the
date of such entry within thirty days from the date of passing of resolution.
Signing
of minutes:
Each
page of every minute shall be initialed or signed and the last page of the
record of proceedings of each meeting or each report in such books shall be
dated and signed.
Person to Sign:
Minutes of proceedings of a meeting of the
Board or of a Committee:
Chairman
of the said meeting or the Chairman of the next succeeding meeting.
Minutes of proceedings of a general meeting:
Chairman of the said meeting within the aforesaid
period of thirty days or in the event of the death or inability of that
chairman within that period, by a director duly authorised by the Board for the
purpose.
Resolution Passed by
Postal Ballot:
Chairman of the Board within the aforesaid period of
thirty days or in the event of there being no chairman of the Board or the
death or inability of that chairman within that period, by a director duly
authorized by the Board for the purpose.
Place of Keeping of
Minutes Book:
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 authorised by the board or at such other
place as may be approved by the Board.
Points to be kept in
Mind while Drafting Minutes:
1. It
shall contain a fair and correct summary of the proceedings.
2. All
appointments made at any of the meetings shall be included in the minutes of
the meeting.
3. In
case of minutes of Board Meeting or committee of the Board, the minutes shall
include the names of the directors present in the meeting and in the case of
each resolution passed at the meeting, the names of the directors, if any
dissenting from, or not concurring with the resolution.
4. Every
company is required to observe the Secretarial Standards with respect to
General or Board Meeting. (which are yet to notified by the Central Government)
PENAL PROVISIONS IN CASE OF
NON-COMPLIANCE:
Company
|
Every Officer who
is in default
|
Rs.
25,000/-
|
Rs.
5000/-
|
TAMPERING WITH THE
MINUTES/PROCEEDINGS OF MINUTES
In
case of tampering with the minutes, the person shall be punishable with
imprisonment for a term which may extend to two years and with fine which shall
not be less than twenty five thousand rupees which may extend to one lakh
rupees.
Comparison
of Companies Act, 2013 and The Companies (Management and Administration) Rules,
2014:
As per Section 118 (1) of Companies Act, 2013
Every
company shall cause minutes of the proceedings of every general meeting of any
class of shareholders or creditors, and every resolution passed by postal
ballot and every meeting of its Board of Directors or of every committee of the
Board, to be prepared and signed in such
manner as may be prescribed and kept within thirty days of the conclusion of
every such meeting concerned, or passing of resolution by postal ballot in
books kept for that purpose with their pages consecutively numbered.
As per Rule 25(1) (d)
(i)
Each
page of every such book shall be initialed or signed and the last page of the
record of proceedings of each meeting or each report in such books shall be
dated and signed in the case of minutes of proceedings of a meeting of the
Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding
meeting.
The Controversial Facts with
regard to signing of minutes:
The Question
arises, whether it is possible for the Company to get its Board or Committee of
Board minutes signed within 30 days if the minutes of the meeting are signed by
the Chairman of the next succeeding meeting.
FAQ’s
Whether it is
mandatory to maintain separate minute’s book for all the Committees formed by
the Board?
Yes,
as per Rule 25(1)(a)(iv) of Companies Management and Administration Rules 2014,
it is mandatory to maintain minute’s book for all the committees formed by the
Board.
Whether confirmation of previous
meeting minutes is mandatory?
Some
of the Companies have the practice of including the item of confirming the
minutes of the previous meeting held. However, the confirmation of previous
minutes is not mandatory under provisions of Companies Act, 2013.
The
Supreme Court Verdict in Kerala State
Electricity Board V/s. Hindustan Construction Co Ltd [2009] 91 SCL 183 (SC).
The
Supreme had stated that, “Confirmation of minutes of previous Board Meeting or
any Committee Meeting does not require confirmation in the subsequent meeting.
Non-confirmation of minutes does not have any effect on the decision taken at
the earlier meeting. When minutes of a meeting are placed before the next
meeting the only thing that can be done is to see whether the decision taken by
the Board at the earlier meeting has been properly recorded or not. Once a
decision is duly taken it can only be changed by a substantive resolution
properly adopted for such change.”
BY
CS
D HEM SENTHIL RAJ
CS K VINOTH
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