A Company is a legal entity incorporated with due process of company registration under the companies act, 2013. All the affairs of the company performed by Directors of the company, which act as the governing body of the company. Further, many statutory powers and rights are also given to stakeholders, members, and debenture holders of the company, along with other key managerial personnel. Where directors are given the responsibility to maintain financial records and registers of the company as per section 170 of the companies act, 2013, members are also given rights to check and inspect records, including minutes book of general meeting in order to maintain transparency and follow corporate governance provisions.
What are the minutes’ books, and how can we define it?
Minutes book of a meeting is official record of proceedings of a meeting as conducted by a company. These are presumed as a legal record of the meeting and can be taken as evidence to prove the fact. The term ‘minute’ has been defined under Section 118 of the companies act, 2013 as:
Minutes book of any meeting conducted by a company should mention a fair and accurate summary of whole proceeding of a meeting. It normally covers the whole meeting in brief as to how, why, and till what conclusion have members of meeting have arrived w.r.t. Business transactions or the agenda of the meeting. Further, every company needs to maintain and preserve minutes of all meetings in its records as per prescribed rules and regulations.
What does Minutes book of meeting include?
Once meeting is concluded, it is pertinent to make minutes book of meeting, and that shall include the following:
- Details about a date, time and place of meeting conducted
- Include meeting agenda
- Quoram of the meeting
- Details about present members or personnel in meeting
- Any amendments to be made in previous minutes of meeting
- Any resolution passed or to be passed or its rejection
- Voting types and their outcome
- Major steps to be incorporated after meeting
- Adjournment of certain matters details
- Incorporation or inclusion of any new business
- Open discussion held
- Date and timing of the next meeting
What is important abstract of Minutes book of general meetings?
Important extracts w.r.t. minutes of proceedings of the general meeting and other board meetings are described under Section 118 of the companies act, 2013[1]. As per Section 110(10), every company needs to maintain secretarial standards in every general meeting as well as board meetings as prescribed and approved by central government. As per that certain provisions has been mentioned emphasizing Minutes book of a company as:
- A company needs to maintain minutes of all general meetings conducted. And said minutes need to maintain and preserve as per prescribed provisions.
- The minutes of every meeting is a summary of the entire meeting and should be fair and accurate.
- Minutes should contain any appointment made during the said meeting
- Minutes should contain information like name and details of every director present in the meeting. In case any resolution is being passed while meeting its description directors in favor or against such resolution
- Abstracts of meeting should not contain any such incident which, as per opinion of chairman of meeting, is considered as defamatory for any person or immaterial or irrelevant as per meeting agenda or is pernicious to the interests of the company.
- Chairman of the meeting have liberty to insert or remove any matter n the meetings as per provisions of subsection (5) of said section
- Minutes to be regarded as legal evidence of meeting and can be submitted as evidence before any authority.
- If the minutes’ book of meeting as kept and recorded as per sub-clause (1), then meeting to consider as duly called and held unless proved contrary. All the resolutions passed, appointments made, or any other important emission to be regarded and deemed as valid.
- Institute of Company Secretaries of India (ICSI) has specified certain secretarial standards that are approved by the central government. These standards need to be observed for every general meeting and board meeting.
- In case of any default made by any company or its officers, then that company be liable to pay a penalty amount of Rs. 25000/-.
- Further, any defaulting officer found guilty shall be punished for a term which may extend till 2 years and further fine of Rs. 5000/-, .which may extend to 1 lakh rupees.
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Who can inspect the extracts of a meeting?
Provisions regarding inspection of minutes books under section 119 of the companies act, 2013:
The right to inspect minutes book of a general meeting has been mentioned under section 119 of the companies act, 2013. As per said section, following provisions has been made:
- Every company is required to maintain minutes of meeting, whether general or postal ballot, at registered office of a company. These records are open to members of company for inspection during normal business hours. In each business day at least 2 hrs to be assigned for inspection purpose as per section 119 (1) of the companies act
- Any member can apply for and take a copy of the said records or extracts. That company is liable to furnish such record copies to the person within 7 working days from the date of request of furnishing copies as per section 119(2) of the companies act, 2013.
- In case a company denies or fails to furnish such copies or extracts as requested, in that scenario, such company or can be penalized for amount of Rs. 25000. In case of any defaulting officer, he can be penalized for Rs. 5000 to each default or refusal as per case under section 119(3) of the companies act, 2013.
- Any person who is aggrieved by company or its officers and fails to furnish such a record can approach NCLT i.e., National Company Law Tribunal of the jurisdiction where companies registered office is present. Concerned Tribunal may direct such company or defaulting officer to furnish such records as required as per section 119(4) of the companies act, 2013.
The Companies (Management & Administration) Rules, 2014:
Certain provisions w.r.t. The inspection of minutes of general meeting made as per the Companies (Management & Administration) Rules, 2014. As per that, any member of company can apply for inspection or get records of minutes book of any general meeting on payment of a prescribed fee but not exceeding Rs. 10 per page. Member is also allowed to apply for electronic record of such minutes of any 3 preceding financial years free of cost.
Any member shall be entitled to be furnished within 7 working daysafter he has made a request in that behalf to the company with a copy of any minutes of any general meeting on payment of such sum as may be prescribed in the articles of the company but not exceeding a sum of Rs. 10 per page or part of any page.
Conclusion:
In order to maintain transparency to records of the company, this provision of companies act is very important under which members have the right to inspect and extract such records of minutes book of any general meeting of the company. Under the new companies act, 2013, many realistic provisions have been laid down in comparison to the old companies’ act of 1956, which have played an important role in order to maintain transparency and maintain corporate governance in companies.
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