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Minutes. General

Must minutes of meetings be taken?

Yes they must. Section 248 of the Act makes it compulsory for board meetings and Section 355 makes it compulsory for general meetings. It is also compulsory for decisions made by means of a written resolution.

If a company fails to comply, an offence is committed by every officer of the company who is in default.

For how long must minutes be kept?

The Act specifies ten years. However, you can probably keep 50 years or more in one filing cabinet so perhaps it might be a good idea to keep them for longer. Old minutes may be very interesting or perhaps even valuable.

Who has responsibility for the minutes?

It is the directors and they have almost total discretion about who does it and how it is done. This applies to both general meetings and board meetings. Of course it is generally accepted that the minutes are the responsibility of the company secretary (if there is one) but this is only the case if it is the wish of the directors. The directors can do it themselves or depute one of their number to do it. They can also ask a member of staff to attend a meeting and take the minutes, or they can bring in an outsider for the purpose.

What does Table A say about minutes?

Table A says very little on minutes. Reg. 100 of Table A states:

'The directors shall cause minutes to be made in books kept for the purpose -

of all appointments of officers made by the directors; and

of all proceedings at meetings of the company, of the holder of any class of shares in the company, and of the directors, and of committees of directors, including the names of the directors present at each such meeting.'

The only specific requirements are that the minutes must give details of appointments made by the directors and the names of directors present, though in practice some sort of attendance register is acceptable and the names need not be recorded in the actual minutes. Beyond this it is down to common law, good practice and the wishes of those concerned.

The new model articles for private companies state, 'The directors must ensure that the company keeps a record, in writing, for at least 10 years from the date of the decision recorded, of every unanimous or majority decision taken by the directors.'

What should be recorded in the minutes?

This is a difficult question to answer. Any specific requirements of the articles should of course be followed. Minutes should record the names of the people present, though it is permissible to record them in some sort of attendance register. They should also record the date of the meeting and the type of meeting (annual general meeting, general meeting, directors' meeting, etc). The name of the chairman should be recorded and key events such as adjournments, etc.

It is essential that all resolutions be listed, together with whether or not they were passed. If a resolution was passed as a special resolution or some other particular sort of resolution, this fact should be recorded. It is not necessary to record the number of votes for and against, though it is sometimes done, and of course the number of votes is not always actually counted at a meeting.

How much detail should be included is a matter of opinion. Many people believe that minutes should normally record the key facts and decisions made, and little if anything else. This happens to be the opinion of the writer. On the other hand some people believe that minutes should be much fuller and record what was said as well as what was decided. These type of minutes are harder to take and it may be hard to ensure that it is an impartial record. This is because it is almost inevitable that some views must be summarised, condensed or left out.

There are times when minutes should be fuller than a bald record of the decisions reached. This would be desirable when it is necessary to show why decisions were taken. An example of this might be a directors' meeting in a company facing financial difficulties. The directors might fear an accusation that they carried on trading beyond the point that trading should have stopped, and would want to show that they took proper advice and considered the implications of their decisions.

Minutes should of course be impartial.

How can a mistake in the minutes be corrected after they have been signed?

Minutes should not be altered after they have been signed. If an error is subsequently discovered, it should be dealt with by means of a subsequent minute.

Is it a requirement that minutes be kept in a bound book?

No this is not a legal requirement although minutes are often kept in this traditional way. It is also permissible and very common for minutes to be kept in a loose-leaf binder. Section 1135 of the Act permits minutes to be kept in computerised form, though it is a requirement that the system is capable of printing out written copies. Although permissible this does pose practical problems concerning signature, verification, etc.

Is it necessary to enter written resolutions of the members or directors in the minute book? And is it necessary to record informal corporate acts by the members in the minute book.

Written resolutions must be entered in the minute book. Informal corporate acts of members should be entered in the minute book if they are of a nature that require it. This of course may well present practical difficulties.

What are the legal requirements when there is a sole director or sole member?

Minutes must still be kept and it is the duty of the sole member or sole director to provide signed minutes. This applies to any formal meeting at which the one person was the sole voting person present, any written resolution of the sole member or sole director, and any decision taken informally by the sole member or sole director that is required to be minuted.

Approval and afterwards

What is the correct system for approving the minutes?

This is not specified by the Act and it is not specified by Table A or the new model articles, though individual company articles may direct what must happen. If they do, the requirements should be observed. Minutes must be taken and kept for at least 10 years, but unless the articles give directions a great deal of freedom is allowed concerning the method of approval. It is not even a requirement that the minutes be signed, though in practice this is almost always done, and for good reasons.

In the opinion of the writer, the person taking the minutes should try to produce them shortly after the meeting. It is best to do this whilst the events are still fresh in his mind, and in the minds of the chairman and others that he might consult. Draft minutes should be circulated as soon after the meeting as possible and before the meeting at which they are to be approved. Approval of the minutes of a directors' meeting should be the first item of business at the next directors' meeting. Discussion should hopefully be brief or non-existent. If there is a discussion, the chairman should ensure that it is confined to the accuracy of the record. A re-run of the discussion at the last meeting should not be allowed. If there is an inaccuracy, it should be corrected prior to signature. A quick vote or informal acceptance should be followed by the chairman's signature.

In the opinion of the writer the minutes of a general meeting should be approved in the same way at the board meeting following the general meeting. In some companies it is the practice for the minutes of one annual general meeting to be approved a year later at the following annual general meeting. This practice has little to commend it and a great deal can be said against it. Many people will have forgotten what happened and some or all of the members present may not have been members at the time of the meeting in question.

Are duly signed minutes conclusive evidence of what happened at a meeting?

No - the evidence is very strong but not conclusive. The Act specifies that minutes signed by the chairman of the meeting at which the business was transacted, or by the chairman of the next succeeding meeting, are evidence of the proceedings and that the meeting has been duly convened and held, unless the contrary is proved. Signed minutes are prima-facie evidence but may be set aside by the court. This could be done, for example, if fraud is proved or an obvious error is shown. This could be, for example, the total number of votes cast being recorded as greater than the total number of votes available to be cast.

Is it necessary to keep the minutes of directors' meetings separate from the minutes of members' meetings?

It is a good idea because members may inspect the minutes of members' meetings, but may only inspect the minutes of directors' meetings with the consent of the directors.

 
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