In Short
- Board minutes are an official legal record of a company’s decisions, resolutions, and actions during board meetings.
- They must be accurate, concise, and held for at least 10 years, in a format that can be printed.
- Directors should ensure any concerns they raise are recorded in the minutes for legal protection.
Tips for Businesses
Ensure that board minutes are always taken accurately and include essential details like the meeting’s date, time, attendees, motions, and resolutions passed. Regularly review the minutes for compliance with legal requirements and keep them well-organised for future reference. This will provide transparency, accountability, and legal protection for your business.
As a business owner, you may want to have board meetings at regular intervals within your company. Board meetings are an important way of deciding strategy. They are also an effective way of taking stock of your business’ financial state. As part of a board meeting, you should take board minutes. These are an official record of the board’s resolutions, actions and decisions. In some cases, the law may require you to keep board minutes in a certain way. This article will explain board minutes and some of the legal requirements for your minutes under English and Welsh company law.
What are Board Meetings?
Board meetings are meetings held by the board of directors of a company, and their frequency depends on the company structure. Publicly listed companies must hold an annual general meeting within the last six months of the calendar year.
Private companies, on the other hand, are not legally required to hold board meetings unless specified in their articles of association. However, many private companies choose to hold regular board meetings as they may be required for certain decisions under the Model Articles, such as declaring dividends or approving significant transactions. However, it is typically good practice to hold one at least once every six months. In these meetings, directors will discuss financial results and outline an agenda for moving forward.
What are Board Minutes?
Board minutes are an official record of a board meeting. They will typically include points such as the meeting agenda, the action items, and other key information from the meeting. They will typically be true and accurate. Minutes should act as a clear and concise way of noting down resolutions that directors pass in the meeting. Usually, the company secretary takes meeting minutes, though there can also be other minute takers. The person taking minutes does not need to be a director or even an employee of the company, but they must maintain confidentiality regarding the company’s affairs.
Having effective and accurate minutes can help future board members get an idea of what the board decided in previous meetings.
Learn how to meet your directors’ duties and ensure compliance with LegalVision’s free UK Board Reporting Toolkit.
What are the Legal Requirements for Board Minutes?
For legal purposes, a board meeting in any company must have minutes. Meeting minutes are taken to be a legal record of the company’s actions, and directors can be criminally liable if they fail to keep minutes in accordance with the law.
An accurate minute of a meeting must be kept within the company’s archives for a minimum of 10 years from the date of the board meeting, and they must be kept in a format that can be printed as a paper copy. This includes electronic storage provided the records remain accessible and can be reproduced in hard copy format. Failure to do this can also result in a large fine, per the Companies Act 2006.
Further, a director may have a concern that the board does not resolve in its meeting. In this case, they must ensure they inform the minute-taker to record their concerns within the meeting minutes. This is particularly important for directors who wish to distance themselves from decisions they believe may breach their fiduciary duties or constitute wrongful trading. In other words, if your company finds itself having legal issues, a board director cannot say that they warned the company about potential problems if the minute-taker did not record the warning. This means that directors can have less legal protection if they do not diligently record minutes.
Finally, the minute takers must be someone who is impartial and independent. This person must also have an understanding of the business and any potential legal or regulatory requirements. This is usually the company secretary, but it can be anyone in theory.
What Should The Board Minutes Include?
To have effective minutes, the minute takers must first ensure that the minutes are accurate, truthful, and concise. Alongside this, they should also make sure that they include certain key information. Best practices for minute-taking include noting:
- the type of meeting (for example, whether it is a regular meeting or a special meeting);
- the date, time, and location of the meeting;
- the organisation’s name;
- the attendees’ full names and their capacity (e.g., director, company secretary);
- confirmation that the meeting was properly constituted and any declarations of interest made by directors;
- any motions and votes that take place during the meeting, including the specific wording of resolutions passed; and
- the minute-taker’s name.
Key Takeaways
As a business owner who holds board meetings, you should be aware of your legal duties when keeping minutes. Board meetings must be minuted per English company law, and it is a good idea to also make sure that they are:
- clear;
- concise; and
- easy to use.
Minutes can be a good way of discussing the business’s progress while also offering legal protection to directors because it is an official record of everything that was said during a meeting. As a result, ensuring your minutes comply with relevant law and are properly archived can help your business follow its action items and develop its long-term strategy.
If you have any questions about board minutes, or require further assistance, our experienced corporate lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
Minutes are a concise summary of the points that were discussed during a meeting. This can include the agenda, relevant information and future steps the board has agreed to take.
In theory, anyone is able to take minutes during a board meeting. However, the minutes must be taken by someone who has good knowledge of the relevant legal and regulatory requirements, and they must also be impartial.
In general, the law requires the minutes to be accurate, truthful and unbiased. Taking minutes is itself a legal obligation for a company, and a failure to do so in line with the law may result in criminal liability. Furthermore, the minutes must be held (in a printable format) in the company’s archives for at least 10 years. If this requirement is not followed, the company may face a significant fine under the Companies Act 2006.
Once board minutes have been formally approved, they should not be altered. However, if errors are discovered, the board can pass a resolution at the next meeting correcting the record and noting the amendment in the new meeting’s minutes.
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