Minutes under Companies Act, 2013
February 28, 2015 by Manav Harivyasi
Minutes not defined under Companies Act, 2013 but according to Business Dictionary, it is Binder or bound book containing permanent and detailed record of the deliberations of, and resolutions adopted at, a Company’s official meetings. All incorporated or registered entities are required by law to maintain an up-to-date minute book which should be accessible to all members of the entity at the entity’s registered office or legal address.
Significant changes brought in by the new Companies Act, 2013:
All the provisions relating to minutes are basically contained under sections 118,119 & 120 and in Rules 25 to 30 of the Companies (Management and Administration) Rules, 2014.
These rules indicate that distinct minute books shall be maintained for General meetings of members, meetings of board, meetings of committees and meetings of creditors. Inclusion of a new class of creditors whose proceedings, if any held, are to be recorded in a minute book, further other important changes are listed below in points:-
- Resolutions passed by Postal ballot shall be recorded in the minutes of General meetings as if it is deemed to have been passed in the General meeting. Although this practice is followed by many companies, uniformity does not exist.
- Secretarial Standards (SS) specified by the Institute of company Secretaries of India under section 3 of the Company Secretaries Act, 1980 shall be observed.
- As per Section 120 of the new Act, read with the new rules(27 to 30), every listed company or a company having not less than 1000 shareholders, debenture holders, and security holders shall maintain records) specified u/s 120 may maintain its minutes book in electronic form. Once the minutes of members meeting are either digitally signed/physically signed and converted into electronic format changes cannot be made. In the case of minutes of proceedings of General meetings, any member shall be entitled to inspect and ask for copies.
If a request is made by any member for copies of minutes in electronic form in respect of 3 preceding general meetings, he shall be entitled to the same free of cost.
- 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 30 days from the date of passing of resolution.
Penalty for defaults in keeping proper minutes:-
- Company in default:- Rs. 25000/-
- Officers in default:- Rs. 5000/-
- If a person is found guilty of tampering with the minutes:- Imprisonment for a term which may extend to 2 years and fine of Rs.25,000/- to Rs.1,00,000/-
Keeping track of minute books are a vital part of a corporate legal assistant’s job. Whether minute books are maintained physically or electronically, maintaining them well and keeping accurate summary sheets can significantly increase efficiency. The ability to put your finger on basic information contained on the summary sheet with ease and confidence makes a legal assistant appear organized and knowledgeable. And, as we all know in the legal field, perception is everything.