P2 - 11. Minutes and minute books

Question 1

What are companies required to keep minutes of?

Answer 1

Meetings of their directors (CA2006 s. 248)

General meetings of their members (CA2006 s. 355(1)(b))

Written resolutions of the members (CA2006 s. 355(1)(a))

Decisions of any sole member (CA2006 s. 355) or sole member of a class (CA2006 s. 359)

Question 2

Whilst the requirement of minutes is not set out in the Act nor the Articles, what is generally agreed as best practice for directors’ minutes to include (static data)?

Answer 2

• company name and registered number (registered number is useful where the company subsequently changes its name);
• place, date and time the meeting commenced;
• attendees (indicating which part of the meeting was attended by those not present for the whole meeting);
• identity of the person chairing the meeting;
• confirmation that a quorum is present;
• declaration of any specific potential conflicts of interest in matters to be discussed or changes of general potential conflicts of interest; and
• time meeting closes.

Question 3

What is included in the variable data?

Answer 3

• matters brought forward and action points from previous meeting(s);
• review and approval for signature of minutes of the previous meeting;
• synopsis of discussions on matters on agenda, actions points, decisions made;
• matters to be carried forward and action points; and
• any other business not on the agenda.

Question 4

Why is it not generally recommended/ relatively uncommon that board meetings are recorded?

Answer 4

Can stifle debate

Question 5

What are the six C’s of minutes?

Answer 5

1. Clarity
2. Coherence
3. Conciseness
4. Consistency
5. Completeness
6. Correctness

Question 6

How can a company’s existence be verified?

Answer 6

Providing copies of the Articles

Certificate of Incorporation

Question 7

What should the minute books provide for companies?

Answer 7

A historical record of significant events

Company’s development over the years

Question 8

What should minutes record?

Answer 8

Decisions reached

Sufficient detail of the discussion

Actions and context

Question 9

Where does the importance of accurate minute taking and the content of board papers come into focus?

Answer 9

s. 172 statement’ as required by CA2006

s. 414CZA in strategic reports and larger companies to report on their engagement and how they have had regard to the interests of members, employees, customers and suppliers.

Question 10

Evidential status is given to minutes of general meetings made under CA2006 s. 255 and signed by the chair as a correct record (CA2006 s. 356). These provisions are replicated for written resolutions of the members by CA2006 s. 382(A).

What are the minutes said to indicate?

Answer 10

• the meeting they relate to is deemed duly held and convened;
• all proceedings at the meeting are deemed to have taken place; and
• all appointments made at the meeting are deemed valid.

Question 11

What is the minute retention period?

Answer 11

Minutes pre-01 October 2007 – permanently

Minutes post 01 October 2007 – 10 years

Question 12

What safeguards can be used to provide additional security against tampering and falsification?

Answer 12

• Sequential numbering of all paragraphs.
• The chair to both sign the last page but also sign or at least initial each page.
• Hard copy minute books to be kept in lockable cupboard with restricted access.
• Where loose-leaf binders are used these should be lockable.
• To mitigate against the insertion of new text, minutes should be printed single spaced, no spaces between
  paragraphs and the signature of the chair on the line immediately following the last paragraph.
• Using special security printed and possibly numbered paper for the copy of the minutes to be signed. This does of course present an additional security risk, as the paper must also be kept securely.

Question 13

How long should a company keep their accounting records?

Answer 13

Private company = Minimum period of three years

Public company = Minimum six years in the case of a public company (CA2006 s. 388(4)).

Question 14

Is it acceptable for minutes of members and directors to simply record decisions?

Answer 14

No – the reasoning behind decisions must be recorded also, to provide context for those not at the meeting.

Question 15

Is it necessary to record attendees at directors’ meetings?

Answer 15

Whilst not a legislative requirement, keeping a record of attendees is considered best practice.

Question 16

Why should a record of votes for and against resolutions be maintained?

Answer 16

Recording the votes cast in respect of a resolution in the minutes is conclusive evidence of the vote unless a different result can be proved

Question 17

What is the purpose of keeping directors’ minutes?

Answer 17

To keep a permanent record of the decisions of the directors and ideally a sense of the discussions and reasons for any decisions reached

Question 18

What are the differing minute retention periods for meetings held before or after 1 October 2007?

Answer 18

Permanently and 10 years respectively

Question 19

What are the dangers of not keeping minute books secure?

Answer 19

Loss of confidentiality, total loss or tampering and alteration

Question 20

How long must a company keep its original, authenticated minutes?

Answer 20

10 years