Minutes of Company Meetings
It is a common misconception that directors are able to decide the affairs of the company without recourse to the board. Regulation 93 of the Table A Articles (which apply to companies formed prior to 1 October 2009, unless amended) and Regulation [number] of Table A Articles in force since 1 October 2009, Regulations 3 and 7 entitle directors of a company to collectively “exercise all the powers of the company”. This means that decisions made by the company must be made by the board of directors by at least a majority, unless the Table A Articles have been amended or some other provision such as delegation to a committee has been made.
Minutes are properly recorded when that are purportedly signed by the chairman of the meeting in which they were made or the next director’s meeting. When minutes are made in this way, a series of presumptions apply. That is, the minuted meeting is deemed duly held and convened, all proceedings at the meeting are deemed to have duly taken place, and (c)all appointments at the meeting are deemed valid.
Where it is the case that minutes of meetings are not kept, then each officer of the company exposes themselves to the risk of having fine imposed. It is therefore important for the directors to ensure that the minutes are properly prepared and filed in minute books.
Minutes of Meetings are intended to record resolutions in meetings – that is, what was agreed by those in attendance. It is good practice to also record:
1. the names of those present at the meeting, and those who are absent;
2. references to any materials put to the board in the meeting, and to keep copies of the same;
3. the resolutions which were passed;
4. instructions to senior management of the company;
5. contracts and transactions authorised during the meeting.
In respect to board meetings, sometimes more detail is required. On occasion it may be appropriate to prepare minutes of narration, which set out the different directors’ position on a proposed resolution leading up to a vote upon the resolution. The reason for this is that a director or number of directors may wish to be seen to be discharging their directors’ duties in accordance with the best interests of the company. Simple recording of what was agreed or decided by the board would not provide any evidence of this. Minuting the context of the decision however provides the background which is more likely to be a fuller picture of the reasons why the board acted in the way that it did.
The Institute of Company Secretaries and Administrators (ICSA) suggests in respect to directors meetings that:
1. Written procedures should be drawn up which suit the way the company operates, distributed to directors,
2. Monitoring for compliance take place from time to time;
3. Each director should be given the same information at the same time and provided with sufficient opportunity to consider it
4. Agreement should be reached in respect to procedures to be adopted for ad-hoc decisions which are required to be made prior to the next scheduled board meeting
5. All paper presented at the meeting should be referenced in the meeting and retained
6. Delegations of powers and responsibilities of the Board should be recorded
Also, directors have duty subject to the Articles of Association to declare any interest he or she may have in a transaction to be entered into by the company. These declarations of interests should be recorded in the minutes.
Furthermore, minutes of proceedings of committees delegated powers of the board should also be minuted.
Minutes of meetings are primary evidence of the proceedings that take place in directors or general meetings, provided that they are signed by the chairman of the meeting or the chairman of the subsequent meeting where the minutes were approved.
Simply because the minutes appear to have been have been properly made, does not mean that the proceedings recorded cannot be challenged as an accurate record of the proceedings they are said to record. It is open to any person to prove that the minutes are not a proper record of the proceedings in the meeting. For instance, a resolution may have been passed but not recorded in the meeting, or the meeting may not have taken place at all. It is for the person alleging that the minuted meeting is not a true and accurate record.
Minutes found to be inaccurate should not be amended or altered, but rather an addendum should be added noting the alteration.
The company secretary is usually responsible for the preparation of minutes, however this need not be the case. In accordance with [authority], the chairman of the meeting may delegate the preparation of meeting to any person with the approval of the board.
Properly administered, the Minutes of Meetings should be circulated in good time before the next meeting. In this way, attendees are able to make enquiries in respect to the minutes and approve the minutes at the next meeting
Minutes that are prepared should be kept in designated “minute books”. Minute Books should be kept in a safe and secure place, in such a way so that tampering is prevented. According to s 1135 of the Companies Act, minutes books may be in electronic form or hardcopy
Inspection of Minutes
English companies are required to keep minutes of general meetings available for inspection to shareholders at the registered offices of the company. Companies are required to keep minutes and resolutions at its registered office for a period of 10 years from the time that they were made.
The shareholders of a company have a statutory right to receive a copy of the minutes, within 14 days of a request, however the company is entitled to charge a fee for making them available.
Minutes of general meetings must be made available for inspection without charge. In addition to this, shareholders must be permitted to take notes of the minutes.
Failure to provide copies of the minutes to shareholders gives rise to liability for a fine. Furthermore, the Court has jurisdiction to make orders for the delivery of minutes, and for that matter copies of resolutions made by the company.
The right to receive copies of minutes do not extend to the proceedings of the board of directors (resolutions or minutes of the board), because this would potentially expose confidential information of the company to any person who acquired a single share in the company. Directors are however entitled to inspect the minutes of directors’ meetings.
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