Hello Everbody,
Extracted some useful information from rushabhinfosoft.com with respect to minutes, which we generally ignore such as Binding of Minutes, minutes as evidence, etc and some other important points.
MINUTES
Minutes of a meeting mean a record of all that has happened at a meeting that is decisions taken on various matters and resolutions adopted thereat. Minutes should exclude speeches or Agreements made at a meeting in connection with discussions and deliberations on any agenda item. Minutes should be fair and correct summary of the proceedings at a meeting as any inaccuracy in it may make it lose its value and usefulness. Minutes can be approved at the end of the meeting itself or at the beginning of the next meeting depending on the custom followed by a company but the general practice is to take necessary notes at the meeting and draw up the minutes after the meeting and approve the said minutes at the next meeting. For Board Meetings or for meetings of a Committee of a Board this is the practice but for General Meeting minutes, they need not be approved at the next meeting but should be drawn up and signed within 30 days of the holding of the General Meeting. Sections 193, 194, 195 and 196 of the Companies Act, 1956, deal with minutes. While section 193 provides for time and manner of keeping minutes and entering minutes in minute books and also signing of minutes, section 194 stipulates that minutes kept in accordance with the provisions of section 193 will be evidence of the proceedings recorded therein and section 195 gives room for presumptions to be drawn where minutes are duly drawn and signed, and section 196 deals with General Meeting Minutes prescribing the place where minutes should be kept and the mode in which they can be inspected.
Minutes should be concise but at the same time contain sufficient details to ensure that a member may understand properly as to what transpired in the meeting in his absence. It should also contain all appointments of officers made at the meetings. Specially minutes of meeting of the Board of Directors or of a Committee of the Board must contain the following:
(a) the names of the directors present at the meeting; and
(b)in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring in, the resolution.
Although minutes should contain an exact account of what decisions were taken at the meeting but it should not contain any matter which in the opinion of the Chairman of the meeting is, or could reasonably be regarded as, defamatory of any person, irrelevant or immaterial to the proceedings or detrimental to the interests of the company.
The Chairman has the power to exercise an absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes.
First and foremost the heading describing the type of meeting the date, time and place of meeting and then the names of the members present at the meeting should be mentioned with designation whether director, managing director, whole time director or manager or secretary, and also the names of members attending the meeting who had voted against or in favour of a resolution. Then should come the item wise heading of the minutes as per the agenda and matters discussed or considered which are not within the agenda should be grouped under other items or miscellaneous items. While minuting the resolutions exact wording of all the resolutions passed at the meeting should be used as far as possible. Complete and exact details of all contracts decided on at the meeting should be minuted with details of appointments, salaries, powers and duties of officials and instructions given to them regarding all authorised transactions.
Minutes should be kept in safe custody preferably in a fireproof safe and should be properly indexed when its subject matter is lengthy. Minutes of meetings of Board of Directors also of Committee of the Board and the minutes of the General Meetings should be made and entered in respective minute books within 30 days of the conclusion of every such meeting. Each page of the minute book should be consecutively numbered. Each page of minute book should also be initialled or signed and the last page of the minutes of each meeting should be dated and signed.
In case of minutes of Board Meetings or a Committee thereof they should be signed by the Chairman of the said meeting or the Chairman of the next succeeding meeting. In case of minutes of General Meetings, they should be signed by the Chairman of the same meeting within 30 days of the conclusion of such meeting and in the event of death or inability of that Chairman within the said period of 30 days by any director duly authorised by the Board of Directors to do so. In no circumstances minutes of a meeting should be attached to any book by pasting or otherwise. Department of Company Affairs has clarified that loose-leaf minute books are permitted, provided the companies keep them in such manner and take appropriate safeguards against interpolation of the leaves in the books such as serial numbering of pages, authentication of each book, safe custody of the keys, if any, to the loose-leaf register. The companies should also ensure that the loose-leaf minutes are bound into books at regular intervals of six months. (Letter No. 16047/TA/VII dated 16-12- 1971). Chairman's rulling will prevail in case of discussions as to the accuracy of the minutes and also with regard to any questions arising out of the minutes. In case a conflict of opinion arises with regard to the accuracy of any minutes, an amendment to the motion suggesting alteration in the minutes will be put to vote and decision taken. In such amendment motion members who are not present in the meeting should avoid taking part in the discussion and should also refrain from voting thereat. Minutes once approved by a meeting merely verifies the accuracy of the minutes and does not amount to adoption of the minutes or confirmation or ratification of the resolutions passed at the meeting.
Section 196 provides that the books containing the minutes of the proceedings of any General Meeting of a company should be kept at the registered office of the company and should be open to the inspection of any member without charge during business hours. Such inspection can be subject to any reasonable restrictions as the company may impose either by its articles of association or by passing a resolution at a General Meeting to that effect so that not less than 2 hours in each day are allowed for inspection. No non-member is allowed to inspect copies of minutes of General Meetings. Minutes of Board Meetings. are absolutely prohibited from inspection and they are also not required to be kept at the registered office of the company. Copies of minutes of any General Meeting should be furnished to any member on request within 7 days of making such request on payment of Re. 1/- by the member for every 100 words or fractional part thereof required to be copied. In case of refusal made by any company to a member in allowing inspection or in furnishing copies of minutes within the prescribed time, the company and every officer of that company will be punishable with fine of5,000/- in respect of each offence. A member who has not been allowed to inspect minutes of General Meetings or take copies of minutes can also go to the Company Law Board for an order, to compel the defaulter company to allow inspection of minutes of General Meeting immediately or to direct the defaulter company to send copies of minutes to the member forthwith. For obtaining such order, a member should make a petition Form No. I given in Annex II to the Company Law Board Regulations, 1991 with a fee of50/- to be paid by way of demand draft.
Section 194 provides that when minutes are kept in accordance with the provisions of section 193, they will be evidence of the proceedings recorded therein. It is important, therefore to ensure that the minutes contain accurate record of all proceedings transacted at the meetings and all appointments made therein. This legal provision that the minutes are evidence of proceedings casts a burden of proving the incorrectness of minutes upon those who so allege [Re. Indian Zoedone Co., (1884) 26 ChD 70]. To fully justify this burden evidence may be given to explain what in fact was done in the meeting even if such explanation contradicts the minutes already recorded. [Re. Fireproof Doors, (1916) 2 Ch 142]. Although minutes are evidence when kept in accordance with statutory provisions, they are not conclusive evidence. [Betts & Co. v. Machaghten, (1910)].
Section 195 provides that where minutes of the proceedings of any general meeting of the company or of any meeting of its Board of directors or of a committee of the Board have been kept in accordance with the provisions of section 193, then until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and in particular, all appointments of directors or liquidators made at the meeting shall be deemed to be valid. A plain reading of this section makes it clear that the presumptions arising in this section is a rebuttable one by adducing contrary evidence and if a proper minutes book is kept and proceedings of meetings are duly recorded it shall be deemed that the meeting has been duly called, held and all proceedings thereat have taken place and the consequent appointment of director or directors has been validly made. If the minutes are not recorded or signed within the prescribed period, then it is to be presumed that it is not properly kept and it will not be receivable in evidence. B. Sivaraman v. Egmore Benefit Society Ltd., (1992) 75 Com Cases 198, 216 (Mad).
Regards
Jaideep Pandya
CAclubindia
