Section 119: Inspection of Minutes Book of General Meeting

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Section 119: Inspection of Minutes Book of General Meeting

Under the Companies Act of 2013, a company is a legal entity that has been incorporated through the proper process of company registration. The company's affairs are managed by the board of directors, which serves as the company's governing body. Many statutory powers and rights are also granted to the company's stakeholders, members, and debenture holders, as well as other key management personnel. Members have the right to check and inspect records, including the minute's book of general meetings, under section 170 of the Companies Act, 2013. This ensures that the company's financial records and registers are kept up to date and that corporate governance provisions are followed.

What are the minutes’ books, and how can we define it?

A meeting's minutes book is an official record of the meeting's proceedings as conducted by a company. These are assumed to be a legal record of the meeting and can be used to establish facts. Section 118 of the Companies Act of 2013 defines the term "minute" as follows:

“[118. (1) Every company shall cause minutes of the proceedings of every general meeting of any grade of shareholders or creditors, and every resolution passed by postal ballot and every meeting of its Board of Directors or of every board of the Board, to be prepared and signed in such manner as may be prescribed and kept within thirty days of the windup of every such meeting concerned, or passing of a resolution by postal ballot in books kept for that purpose with their pages consecutively numbered.]”

Any meeting minutes book kept by a company should include a fair and accurate summary of the entire meeting's proceedings. It usually summarises the entire meeting, including how, why, and to what conclusion members of the meeting have arrived in terms of business transactions or the meeting's agenda. Furthermore, according to the rules and regulations, every company must keep and preserve the minutes of all meetings in its records.

What does the Minutes book of meeting include?

Once the meeting is over, it's important to make a meeting minutes book, which should include the following:

Once the meeting is over, it's important to make a meeting minutes book, which should include the following:

1. Details about the meeting's date, time, and location

2. Include the agenda for the meeting.

3. The meeting's quorum

4. Details about the meeting's current members or personnel

5. Any changes to previous meeting minutes that need to be made

6. Any resolution that has been passed or is about to be passed, or that has been rejected

7. The different types of voting and how they affect the outcome

8. Following the meeting, there will be several major steps to take.

9. Details on the adjournment of certain matters

10. Any new company's incorporation or inclusion

11. There was an open discussion.

12. The next meeting's date and time

What is the important abstract of the Minutes book of general meetings?

Section 118 of the Companies Act, 2013[1] describes important extracts relating to minutes of general meetings and other board meetings. According to Section 110(10), every company must adhere to secretarial standards in all general and board meetings, as prescribed and approved by the federal government. As a result, certain provisions have been mentioned emphasizing a company's Minutes book, such as:

1. All general meetings held by a company must be documented in minutes. And the minutes must be kept and preserved according to the rules.

2. Every meeting's minutes should be fair and accurate because they are a summary of the entire meeting.

3. Any appointments made during the meeting should be recorded in the minutes.

The minutes should include information such as the name and contact information of each director present at the meeting. If a resolution is passed during a meeting, the number of directors voting in favor or against the resolution is recorded.

4. Meeting abstracts should not include any incident that, in the opinion of the meeting chairman, is defamatory to any person, is immaterial or irrelevant to the meeting agenda, or is harmful to the company's interests.

5. As per the provisions of subsection (5) of said section, the chairman of the meeting has the authority to add or remove any matter from the meetings. Minutes will be considered legal evidence of the meeting and can be presented to any authority.

6. Unless proven otherwise, the meeting will be considered duly called and held if the minutes' book is kept and recorded in accordance with sub-clause (1).

7. All resolutions passed, appointments made, and any other significant emission must be taken into account and deemed valid.

8. The Indian Institute of Company Secretaries (ICSI) has established secretarial standards that have been approved by the central government. Every general meeting and board meeting must adhere to these guidelines.

9. In the event that a company or its officers commit a violation, the company will be liable to pay a penalty of Rs. 25000/-.

10. Furthermore, any defaulting officer found guilty faces a sentence of up to two years in prison and a fine of Rs. 5000/-, with a maximum penalty of Rs. 1 lakh rupees.

Who can inspect the extracts of a meeting?

Inspection of minutes books provisions under section 119 of the Companies Act of 2013:

Section 119 of the Companies Act of 2013 mentions the right to inspect the minute's book of a general meeting. The following provisions have been made in accordance with said section:

Every company must keep minutes of all meetings, whether general or postal ballot, at its registered office. During normal business hours, members of the company can inspect these records. Section 119 (1) of the Companies Act requires that at least two hours of each business day be set aside for inspection purposes.

Any member can request and receive a copy of the aforementioned records or extracts. As per section 119(2) of the Companies Act, 2013, the company is required to provide such record copies to the person within 7 working days of receiving the request.

In the event that a company refuses or fails to provide the requested copies or extracts, the company or individual may be fined Rs. 25000. Under section 119(3) of the Companies Act, 2013, any defaulting officer can be fined Rs. 5000 for each default or refusal.

Any person who is harmed by a company or its officers for failing to provide such a record can file a complaint with the NCLT, or National Company Law Tribunal, in the jurisdiction where the company's registered office is located. As per section 119(4) of the Companies Act, 2013, the Concerned Tribunal may order such company or defaulting officer to provide such records as required.

The Companies (Management & Administration) Rules, 2014:

The Companies (Management & Administration) Rules, 2014, contain certain provisions regarding the inspection of minutes of general meetings. According to that, any member of the company can apply for inspection or obtain copies of the minute's book of any general meeting for a fee of Rs. 10 per page. Members may also request a free electronic record of such minutes from the previous three fiscal years.

On payment of such sum as may be prescribed in the articles of the company but not exceeding Rs. 10 per page or part of a page, any member shall be entitled to receive a copy of any minutes of any general meeting within 7 working days after making a request in that behalf to the company.

Conclusion-

This provision of the Companies Act, which gives members the right to inspect and extract records from the minutes book of any general meeting of the company, is very important in order to maintain transparency in the company's records. In comparison to the old companies act of 1956, the new companies act of 2013 contains many practical provisions that have helped companies maintain transparency and corporate governance.