Section 118 of Companies Act, 2013 – Minutes of Proceedings of General Meeting, Meeting of Board of Directors and Other Meeting and Resolutions Passed By Postal Ballot

SECTION 118. MINUTES OF PROCEEDINGS OF GENERAL MEETING, MEETING OF BOARD OF DIRECTORS AND OTHER MEETING AND RESOLUTIONS PASSED BY POSTAL BALLOT

[Effective from 1st April, 2014]

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

[5] [Provided that in case of a Specified IFSC private company, the minutes of every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in the manner as may be prescribed under sub section (1) at or before the next Board or committee meeting, as the case may be and kept in books kept for that purpose.]

[6] [“Provided that in case of a Specified IFSC public company, the minutes of every meeting of its Board of Directors or of every committee of the Board, to be prepared and signed in the manner as may be prescribed under sub-section (1) at or before the next Board meeting or committee meeting, as the case may be and kept in the books kept for that purpose.]

(2) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.

(3) All appointments made at any of the meetings aforesaid shall be included in the minutes of the meeting.

(4) In the case of a meeting of the Board of Directors or of a committee of the Board, the minutes shall also contain—

(a) the names of the directors present at the meeting; and

(b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring with the resolution.

(5) There shall not be included in the minutes, any matter which, in the opinion of the Chairman of the meeting,—

(a) is or could reasonably be regarded as defamatory of any person; or

(b) is irrelevant or immaterial to the proceedings; or

(c) is detrimental to the interests of the company.

(6) The Chairman shall exercise absolute discretion in regard to the inclusion or non-inclusion of any matter in the minutes on the grounds specified in sub-section (5).

(7) The minutes kept in accordance with the provisions of this section shall be evidence of the proceedings recorded therein.

(8) Where the minutes have been kept in accordance with sub-section (1) then, until the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings thereat to have duly taken place, and the resolutions passed by postal ballot to have been duly passed and in particular, all appointments of directors, key managerial personnel, auditors or company secretary in practice, shall be deemed to be valid.

(9) No document purporting to be a report of the proceedings of any general meeting of a company shall be circulated or advertised at the expense of the company, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.

(10) Every company shall observe secretarial standards with respect to general and Board meetings specified by the Institute of Company Secretaries of India constituted under section 3 of the Company Secretaries Act, 1980 (56 of 1980), and approved as such by the Central Government.

Exemption

In case of a Specified IFSC private company Sub-section (10) shall not apply vide Notification no. G.S.R. 9(E).dated 04th January, 2017.

In case of a Specified IFSC public company Sub-section (10) shall not apply vide Notification no. G.S.R. 08(E).dated 04th January, 2017.

(11) If any default is made in complying with the provisions of this section in respect of any meeting, the company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees.

(12) If a person is found guilty of tampering with the minutes of the proceedings of meeting, he shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees.

EXEMPTIONS

Section 118 shall not apply as a whole to Section 8 Companies except that minutes may be recorded within thirty days of the conclusion of every meeting in case of companies where the articles of association provide for confirmation of minutes by circulation, as amended vide Notification No. 466(E) dated 5th June, 2015.

The above mentioned exception shall be applicable to a Section 8 company which has not committed a default in filing its financial statements under section 137 of the said Act or annual return under section 92 of the said Act with the Registrar, vide amendment notification G.S.R. 584(E) dated 13th June 2017. 

Applicable Rules

Companies (Management and Administration) Rules, 2014

[Effective from 1st April, 2014]

Rule 25. Minutes of proceedings of general meeting, meeting of Board of Directors and other meetings and resolutions passed by postal ballot.—(1) (a) A distinct minute book shall be maintained for each type of meeting namely:—

(i) general meetings of the members;

(ii) meetings of the creditors

(iii) meetings of the Board; and

(iv) meetings of each of the committees of the Board.

Explanation.—For the purposes of this sub-rule, resolutions passed by postal ballot shall be recorded in the minute book of general meetings as if it has been deemed to be passed in the general meeting.

(b) (i) The minutes of proceedings of each meeting shall be entered in the books maintained for that purpose along with the date of such entry within thirty days of the conclusion of the meeting.

(ii) In case of every resolution passed by postal ballot, a brief report on the postal ballot conducted including the resolution proposed, the result of the voting thereon and the summary of the scrutinizer’s report shall be entered in the minutes book of general meetings along with the date of such entry within thirty days from the date of passing of resolution.

Each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting or each report in such books shall be dated and signed—

(i)   in the case of minutes of proceedings of a meeting of the Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding meeting;

(ii)   in the case of minutes of proceedings of a general meeting, by the chairman of the same meeting within the aforesaid period of thirty days or in the event of the death or inability of that chairman within that period, by a director duly authorised by the Board for the purpose;

(iii)   In case of every resolution passed by postal ballot, by the chairman of the Board within the aforesaid period of thirty days or in the event of there being no chairman of the Board or the death or inability of that chairman within that period, by a director duly authorized by the Board for the purpose.

(e)[1]   The minute books of general meetings, shall be kept at the registered office of the company and shall be preserved permanently and kept in the custody of the company secretary or any director duly authorised by the board [***][2].

(f)[3]   The minutes books of the Board and committee meetings shall be preserved permanently and kept in the custody of the company secretary of the company or any director duly authorized by the Board for the purpose and shall be kept in the registered office or such place as Board may decide.

Applicable Notification

THE INSTITUTE OF COMPANY SECRETARIES OF INDIA

(Statutory Body under an Act of Parliament)

Notification No.F. No. ICSI/6/2017 dated 16th August, 2017

The Notification ICSI No.1 (SS) of 2015 dated 23rd April, 2015, published in the Gazette of India, Part III, Section 4, with regard to (i) SS-1: Secretarial Standard on Meetings of the Board of Directors and (ii) SS-2: Secretarial Standard on General Meetings, stands withdrawn* w.e.f. 30th September, 2017 without affecting the enforceability of SS-1 and SS-2 during the period before such withdrawal.

[*Since there is no such statutory requirement for publication of the aforesaid Secretarial Standards in the Gazette of India]

Announcement on Revised Secretarial Standards On Meetings of the Board of Directors (SS-l) and General Meetings (SS-2) by ICSI

“Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) were approved by the Central Government under Section 118(10) of the Companies Act, 2013 on 10th April, 2015 and were published in the Gazette of India Extraordinary Part III -Section 4 on 23 rd April, 2015 vide ICSI Notification No. (1) SS of 2015, making them effective from 1 st July, 2015. It has been decided to withdraw such notification w.e.f. 30th September, 2017 without affecting the enforceability of SS-1 and SS-2 during the period before such withdrawal. Now, the Secretarial Standards have been revised by the ICSI and approval of the Central Government, as required, under section 118(10) of the Companies Act, 2013 has been obtained for the revised SS-l and SS-2 vide Ministry of Corporate Affairs letter No. 1/3/2014-CL.I dated 14th June, 2017. The revised SS-l and SS-2 shall be applicable for compliance by all the companies (except the exempted class of companies) w.e.f. 1st October, 2017 and will supersede the text of earlier SS-l and SS-2.”

[1](d) Each page of every such book shall be initialed or signed and the last page of the record of proceedings of each meeting or each report in such books shall be dated and signed—

(i) in the case of minutes of proceedings of a meeting of the Board or of a committee thereof, by the chairman of the said meeting or the chairman of the next succeeding meeting;

(ii) in the case of minutes of proceedings of a general meeting, by the chairman of the same meeting within the aforesaid period of thirty days or in the event of the death or inability of that chairman within that period, by a director duly authorised by the Board for the purpose;

(iii) In case of every resolution passed by postal ballot, by the chairman of the Board within the aforesaid period of thirty days or in the event of there being no chairman of the Board or the death or inability of that chairman within that period, by a director duly authorized by the Board for the purpose.

[2](e) The minute books of general meetings, shall be kept at the registered office of the company and shall be preserved permanently and kept in the custody of the company secretary or any director duly authorised by the board [4][***].

[3](f) The minutes books of the Board and committee meetings shall be preserved permanently and kept in the custody of the company secretary of the company or any director duly authorized by the Board for the purpose and shall be kept in the registered office or such place as Board may decide.

[1] (sic) (c)

[2] (sic) (d)

[3] (sic) (e)

[4] Omitted words “or such other place as may be approved by the Board” by the Companies (Management and Administration) Amendment Rule, 2016 vide Notification No. F. No. 1/34/2013 CL-V-Part-I dated 23rd September, 2016.

[5] Inserted vide Notification no. G.S.R. 9(E).dated 04th January, 2017.

[6] Inserted vide Notification no. G.S.R. 9(E).dated 04th January, 2017.