It is one thing to have a productive company board or committee meeting but the value is in the record that results from the meeting. The record is noted by way of “Minutes” and needs to conform to the statutory obligations as set out in section 251A of the Corporations Act 2001.
Minutes are fundamentally important from a corporate governance perspective considering they are evidence of business transacted during the meeting (including decisions made and action taken) and they can be relied upon to protect or incriminate board or committee members.
Pursuant to section 251B of the Act, a company must ensure that the minute books for the meetings of its shareholders are available for inspection by shareholders free of charge.
Failure to strictly comply with the statutory obligations under section 251A is a criminal offence attracting a maximum penalty of three months in prison or a fine in the sum of $2,100 or both.
Unless prescribed by a Company’s Constitution, Minutes need not be in any particular format but should, in the author’s opinion, record the following:
- Company name and ACN;
- Type of meeting (Directors, Shareholders / Members and whether it is a regular or extraordinary / special meeting);
- Date, time and place of meeting;
- Names and capacity of people present and who was appointed Chairperson);
- Subject matter of meeting and any background material distributed before or at meeting attached to the minutes;
- Resolutions made at meeting; and
- Signed by Chairperson of the meeting.
It is a timely reminder for companies to review their Minute taking processes and standards (in the recording and storage of accurate Minutes) to ensure compliance with their statutory obligations.
For further information please contact Lorenzo on 8362 6400 or email Lorenzo Mazzocchetti. Join our mailing list to receive updates and advice on current issues.