Summary
- Board meetings must be minuted as a legal requirement under English and Welsh company law, and directors can face criminal liability for failing to comply.
- Minutes must be kept in a printable format for a minimum of 10 years, and failure to do so may result in a significant fine under the Companies Act 2006.
- Directors should ensure their concerns are recorded in the minutes to maintain legal protection, particularly where they disagree with a board decision.
- This article is a plain-English guide to board minutes for business owners operating under English and Welsh company law.
- It has been produced by LegalVision, a commercial law firm that specialises in advising clients on corporate governance and company law obligations.
Tips for Businesses
Appoint an impartial minute-taker with knowledge of relevant legal requirements. Record all resolutions with precise wording, note any director concerns, and store approved minutes in both physical and electronic formats. Review your articles of association to confirm whether board meetings are required and how often they should be held.
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 are not legally required to hold board meetings unless specified in their articles of association. However, many choose to hold them regularly. They may also be required for certain decisions under the Model Articles, such as declaring dividends or approving significant transactions.
It is typically good practice to hold a board meeting at least once every six months. In these meetings, directors will discuss financial results and outline an agenda for the business 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 discussed in the meeting. Minutes should act as a clear, accurate 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.
Board minutes also serve as a valuable tool for demonstrating corporate governance and compliance to external stakeholders, including auditors, investors, and regulatory bodies. Well-maintained minutes can provide evidence that the board has fulfilled its duties and acted in the company’s best interests.
Additionally, in the event of disputes or legal proceedings, board minutes may be used as evidence to show that proper procedures were followed and decisions were made appropriately. Therefore, maintaining comprehensive and accurate minutes is not only a legal requirement but also a practical necessity for protecting the company and its directors.
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What are the Legal Requirements for Board Minutes?
Board meetings must have minutes as a legal record. Directors can be criminally liable for failing to keep them. Minutes must be retained for a minimum of 10 years in a format reproducible as a hard copy, including electronic storage.
Directors with unresolved concerns must ensure they are recorded in the minutes. Without this, directors cannot later claim they raised warnings, reducing their legal protection against breaches of fiduciary duty or wrongful trading.
Quorum need not be noted unless specifically referenced, though it is good practice to record that the meeting was held in accordance with the company’s articles of association.
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 and company number;
- 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.
Your business must fulfil its legal duties when taking meeting minutes and adhere to best practices. Minutes serve as a legal record and document the agenda and actions taken at a given time. They are useful in subsequent board meetings discussing the same agenda items and help maintain a long-term strategy.
Learn how to meet your directors’ duties and ensure compliance with LegalVision’s free UK Board Reporting Toolkit.
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 document business progress and provide legal protection as an official record of proceedings. Ensuring compliance and proper archiving helps your business track action items and develop its long-term strategy.
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Frequently Asked Questions
What are minutes?
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.
Who can be a minute taker?
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.
Are there legal requirements for taking minutes?
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.
Can board minutes be amended after they have been approved?
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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