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MAINTAINING OF MINUTES FOR PRIVATE COMPANIES?

MAINTAINING OF MINUTES FOR PRIVATE COMPANIES?

INTRODUCTION

The Companies Act, 2013 (the “Act”) mandates that every company, including a private company, maintain minutes of all its meetings. The minutes of a meeting should be recorded in chronological order and should include the following:

  1. The date, time, and place of the meeting
  2. The names of the directors and/or members present
  3. The names of the directors and/or members absent
  4. A summary of the discussions that took place
  5. The resolutions that were passed
  6. The names of the directors and/or members who voted for and against each resolution

Here are some of the advantages and disadvantages of maintaining minutes for private companies.

ADVANTAGES:

  1. Legal compliance: The Companies Act, 2013 mandates that all companies maintain minutes of their meetings. By doing so, companies can avoid penalties for non-compliance.
  2. Record of decisions: The minutes of a meeting are a record of the decisions that were made by the directors or members of a company. This can be useful for future reference, as it can help to ensure that the company is operating in accordance with its own policies and procedures.
  3. Evidence of decision-making: The minutes of a meeting can be used as evidence of the decision-making process that took place during the meeting. This can be useful if there is ever a dispute about a decision that was made.
  4. Communication: The minutes of a meeting can be used to communicate the decisions that were made to the members of the company. This can help to ensure that everyone is on the same page and that there is no confusion about what was decided.

DISADVANTAGE:

  1. Time-consuming: Maintaining minutes can be time-consuming, especially for large companies that hold frequent meetings.
  2. Cost: There is a cost associated with maintaining minutes, such as the cost of printing and binding the minutes book.
  3. Accuracy: It is important to ensure that the minutes are accurate and complete. If the minutes are not accurate, they can be used as evidence against the company in a legal dispute.

Confidentiality: The minutes of a meeting may contain confidential information. It is important to take steps to protect the confidentiality of this information

CONCLUSION

The maintenance of minutes for a private company is an important task that should be taken seriously. The minutes serve as a record of the proceedings of the company’s meetings, and they can be used as evidence in court in the event of a dispute. Here are some key points to keep in mind when maintaining minutes for a private company:

  1. The minutes should be recorded in a book. A separate book should be maintained for the board meetings and for each of the company’s committees.
  2. The minutes should be maintained in either electronic or physical form with a timestamp.
  3. The minutes should be recorded in a systematic manner, with the general content mentioned first, followed by the specific content.
  4. The minutes should be written in past tense and in a third person form. However, resolutions should be recorded in present tense.
  5. The minutes should be circulated to all directors within 15 days of the meeting. Directors should have the opportunity to make comments on the minutes, which should then be incorporated into the minutes within 7 days.
  6. The minutes should be signed by the chairman of the meeting and by the company secretary.

HOW AURIGA ACCOUNTING HELP YOU

  1. Help in Legal compliance and decision-making.
  2. Reduces of Accuracy, Cost and risk.
  3. Maintain and protect to business.
  4. Maintain minutes of all its meetings.