Wednesday, 5 August 2015

Decoding Secretarial Standards – Maintenance of Minutes

In this post, I will discuss Secretarial Standards related to Maintenance of Minutes under SS – 1 and SS – 2.
Every company shall keep Minutes of all General Meetings, Board and Committee Meetings in a Minutes Book. Minutes kept in accordance with the provisions of the Act evidence the proceedings recorded therein. Minutes help in understanding the deliberations and decisions taken at the Meeting. [Paragraph 7 of SS – 1 and Paragraph 17 of SS – 2]
Maintenance of Minutes:
Minutes shall be recorded in books maintained for that purpose. [Paragraph 7.1.1 of SS – 1 and Paragraph 17.1.1 of SS – 2]
A distinct Minutes Book shall be maintained for Meetings of the Board and each of its Committees. A distinct Minutes Book shall be maintained meeting of the Members of the company, creditors and others as may be required under the Act. [Paragraph 7.1.2 of SS – 1 and Paragraph 17.1.2 of SS – 2]

Minutes may be maintained in electronic form in such manner as prescribed under the Act and as may be decided by the Board. Minutes in electronic form shall be maintained with Timestamp. [Paragraph 7.1.3 of SS – 1 and Paragraph 17.1.3 of SS – 2]
A company may maintain its Minutes in physical or in electronic form with Timestamp. [Background Paragraph 1 after Paragraph 7.1.3 of SS – 1 and Paragraph 17.1.3 of SS – 2]
Every company shall however follow a uniform and consistent form of maintaining the Minutes. Any deviation in such form of maintenance shall be authorised by the Board. [Background Paragraph 2 after Paragraph 7.1.3 of SS – 1 and Paragraph 17.1.3 of SS – 2]
The pages of the Minutes Books shall be consecutively numbered. [Paragraph 7.1.4 of SS – 1 and Paragraph 17.1.4 of SS – 2]
This shall be followed irrespective of a break in the Book arising out of periodical binding in case the Minutes are maintained in physical form. This shall be equally applicable for maintenance of Minutes Book in electronic form with Timestamp. [Background Paragraph 1 after Paragraph 7.1.4 of SS – 1 and Paragraph 17.1.4 of SS – 2]
In the event any page or part thereof in the Minutes Book is left blank, it shall be scored out and initialled by the Chairman who signs the Minutes. [Background Paragraph 2 after Paragraph 7.1.4 of SS – 1 and Paragraph 17.1.4 of SS – 2]
Minutes shall not be pasted or attached to the Minutes Book, or tampered with in any manner. [Paragraph 7.1.5 of SS – 1 and Paragraph 17.1.5 of SS – 2]
Minutes of the Board Meetings, if maintained in loose-leaf form, shall be bound periodically depending on the size and volume. (This may be coinciding with one or more financial years of the company). [Paragraph 7.1.6 of SS – 1 and Paragraph 17.1.6 of SS – 2]
There shall be a proper locking device to ensure security and proper control to prevent removal or manipulation of the loose leaves. [Background Paragraph 1 after Paragraph 7.1.6 of SS – 1 and Paragraph 17.1.6 of SS – 2]
Minutes of the Board Meeting shall be kept at the Registered Office of the company or at such other place as may be approved by the Board. [Paragraph 7.1.7 of SS – 1 and Paragraph 17.1.7 of SS – 2]
Recording of Minutes:
Minutes shall contain a fair and correct summary of the proceedings of the Meeting. [Paragraph 7.3.1 of SS – 1 and Paragraph 17.3.1 of SS – 2]
The Company Secretary shall record the proceedings of the Meetings. Where there is no Company Secretary, any other person duly authorised by the Board or by the Chairman in this behalf shall record the proceedings. [Background Paragraph 1 after Paragraph 7.3.1 of SS – 1 and Paragraph 17.3.1 of SS – 2]
The Chairman shall ensure that the proceedings of the Meeting are correctly recorded. [Background Paragraph 2 after Paragraph 7.3.1 of SS – 1 and Paragraph 17.3.1 of SS – 2]
The Chairman has absolute discretion to exclude from the Minutes, matters which in his opinion are or could reasonably be regarded as defamatory of any person, irrelevant or immaterial to the proceedings or which are detrimental to the interests of the company. [Background Paragraph 3 after Paragraph 7.3.1 of SS – 1 and Paragraph 17.3.1 of SS – 2
Minutes shall be written in clear, concise and plain language. [Paragraph 7.3.2 of SS – 1 and Paragraph 17.3.2 of SS – 2]
Minutes shall be written in third person and past tense. Resolutions shall however be written in present tense. [Background Paragraph 1 after Paragraph 7.3.2 of SS – 1 and Paragraph 17.3.2 of SS – 2]
Minutes need not be an exact transcript of the proceedings at the Meeting. [Background Paragraph 2 after Paragraph 7.3.2 of SS – 1 and Paragraph 17.3.2 of SS – 2]
In case any Director requires his views or opinion on a particular item to be recorded verbatim in the Minutes, the decision of the Chairman whether or not to do so shall be final. [Background Paragraph 2 after Paragraph 7.3.2 of SS – 1]
In any case, views of the director shall be summarised. The Chairman is empowered not to permit verbatim record but record will be there.
Each item of business taken up at the meeting shall be numbered. [Paragraph 17.3.3 of SS – 2]
Numbering shall be in a manner which would enable ease of reference or cross – reference. [Background Paragraph 1 after Paragraph 17.3.3 of SS – 2]
In my opinion provision similar to this may be incorporated in SS – 1 also. Otherwise, companies may comply with this standard.
Any document, report or notes placed before the Board and referred to in the Minutes shall be identified by initialling of such document, report or notes by the Company Secretary or the Chairman. [Paragraph 7.3.3 of SS – 1]
Wherever any approval of the Board is taken on the basis of certain papers laid before the Board, proper identification shall be made by initialling of such papers by the Company Secretary or the Chairman and a reference thereto shall be made in the Minutes. [Background Paragraph 1 after Paragraph 7.3.3 of SS – 1]
Where any earlier Resolution (s) or decision is superseded or modified, Minutes shall contain a reference to such earlier Resolution (s) or decision. [Paragraph 7.3.4 of SS – 1]
Minutes of the preceding Meeting shall be noted at a Meeting of the Board held immediately following the date of entry of such Minutes in the Minutes Book. [Paragraph 7.4.5 of SS – 1]
Minutes of the Meetings of any Committee shall be noted at a Meeting of the Board held immediately following the date of entry of such Minutes in the Minutes Book. [Background Paragraph 1 after Paragraph 7.4.5]
Finalisation of Minutes:
Within fifteen days from the date of the conclusion of the Meeting of the Board or the Committee, the draft Minutes thereof shall be circulated by hand or by speed post or by registered post or by courier or by e-mail or by any other recognised electronic means to all the members of the Board or the Committee for their comments. [Paragraph 7.4 of SS – 1]
Where a Director specifies a particular means of delivery of draft Minutes, these shall be sent to him by such means. [Background Paragraph 1 after Paragraph 7.4 of SS – 1]
If the draft Minutes are sent by speed post or by registered post or by courier, an additional two days may be added for delivery of the draft Minutes. [Background Paragraph 2 after Paragraph 7.4 of SS – 1]
Proof of sending draft Minutes and its delivery shall be maintained by the company. [Background Paragraph 3 after Paragraph 7.4 of SS – 1]
The Directors, whether present at the Meeting or not, shall communicate their comments, if any, in writing on the draft Minutes within seven days from the date of circulation thereof, so that the Minutes are finalised and entered in the Minutes Book within the specified time limit of thirty days. [Background Paragraph 4 after Paragraph 7.4 of SS – 1]
If any Director communicates his comments after the expiry of the said period of seven days, the Chairman shall have the discretion to consider such comments. [Background Paragraph 5 after Paragraph 7.4 of SS – 1]
In the event a Director does not comment on the draft Minutes, the draft Minutes shall be deemed to have been approved by such Director. [Background Paragraph 6 after Paragraph 7.4 of SS – 1]
A Director, who ceases to be a Director after a Meeting of the Board is entitled to receive the draft Minutes of that particular Meeting and to offer comments thereon, irrespective of whether he attended such Meeting or not. [Background Paragraph 7 after Paragraph 7.4 of SS – 1]
Entry in the Minutes Book:
Minutes shall be entered in the Minutes Book within thirty days from the date of conclusion of the Meeting. [Paragraph 7.5.1 of SS – 1 and Paragraph 17.4.1 of SS – 2]
In case a Meeting is adjourned, the Minutes in respect of the original Meeting as well as the adjourned Meeting shall be entered in the Minutes Book within thirty days from the date of the respective Meetings. [Background Paragraph 1 after Paragraph 7.5.1 of SS – 1 and Paragraph 17.4.1 of SS – 2]
The date of entry of the Minutes in the Minutes Book shall be recorded by the Company Secretary. [Paragraph 7.5.2 of SS – 1 and Paragraph 17.4.2 of SS – 2]
Where there is no Company Secretary, it shall be entered by any other person duly authorised by the Board or by the Chairman. [Background Paragraph 1 after Paragraph 7.5.2 of SS – 1 and Paragraph 17.4.2 of SS – 2]
Minutes, once entered in the Minutes Book, shall not be altered. In case of Board or Committee meetings, any alteration in the Minutes as entered shall be made only by way of express approval of the Board at its subsequent Meeting in which such Minutes are sought to be altered. [Paragraph 7.5.3 of SS – 1 and Paragraph 17.4.3 of SS – 2]
Signing and Dating of Minutes:
Minutes of a General Meeting Shall be signed and dated by the chairman of the meeting or in the event of death or inability or inability of that chairman, by any Director who was present in the meeting and duly authorised by the Board for the purpose, within thirty days of the General Meeting. [Paragraph 17.5.1]
Minutes of the Meeting of the Board shall be signed and dated by the Chairman of the Meeting or by the Chairman of the next Meeting. [Paragraph 7.6.1 of SS – 1]
Minutes of the previous Meeting may be signed either by the Chairman of such Meeting at any time before the next Meeting is held or by the Chairman of the next Meeting at the next Meeting. [Background Paragraph 1 after Paragraph 7.6.1 of SS – 1]
There is no time frame for signing of Minutes of board or committee meeting.
The Chairman shall initial each page of the Minutes, sign the last page and append to such signature the date on which and the place where he has signed the Minutes. [Paragraph 7.6.2 of SS – 1 and Paragraph 17.5.2]
Any blank space in a page between the conclusion of the Minutes and signature of the Chairman shall be scored out. [Background Paragraph 1 after Paragraph 7.6.2 of SS – 1 and Paragraph 17.5.2]
If the Minutes are maintained in electronic form, the Chairman shall sign the Minutes digitally. [Background Paragraph 2 after Paragraph 7.6.2 of SS – 1 and Paragraph 17.5.2]
Minutes, once signed by the Chairman, shall not be altered, save as mentioned in this Standard. [Paragraph 7.6.3 of SS – 1]
A copy of the signed Minutes certified by the Company Secretary or where there is no Company Secretary, by any Director authorised by the Board shall be circulated to all Directors within fifteen days after these are signed. [Paragraph 7.6.4 of SS – 1]
At the end of this post, I want to mention that some provisions I criticised here may be taken from the Act or relevant Rules and in such case may be treated my suggestion for relevant changes the Act or these Rules.

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