Minutes of First Board Meeting

Minutes of a Board Meeting is a formal written record, in physical or electronic form. In short, board meeting minutes contain a summary of the matters discussed and decisions taken at such meeting. Further, all companies registered in India are required to maintain minutes, except OPC and Section 8 Company,.

The minutes shall be maintained as per the manner prescribed in Section 118 of the Companies Act, 2013 and Secretarial Standard on Meetings of Board of Directors issued by the Institute of Company Secretaries of India (ICSI).

Board Meetings

As per section 173(1) of the Companies Act, 2013, every company is required to hold its first Board Meeting within 30 days of incorporation.

Thereafter, a company is required to hold at least 4 Board Meetings in each Financial Year and the gap between two meetings shall not be greater than 120 days.

Agenda Items for first Board Meeting

The following items must be a part of the minutes of the first board meeting:

  1. Elect the Chairperson of the meeting
  2. Grant leave of absence to the Directors who couldn’t attend the meeting
  3. Authorize a person to record the proceeding of Board Meetings.
  4. Authorize a director of Company to certify and circulate certify copy of Board Minutes.
  5. Note the Certificate of Incorporation of the company, issued by the Registrar of Companies
  6. Take note of the Memorandum and Articles of Association of the company, as registered.
  7. To take note of the Registered Office of the company.
  8. To confirm/note the appointment of the first directors of the Company
  9. Disclosure of interest of Board of Directors of the Company as per the provision of Section 184 of the Companies Act, 2013.
  10. Disclosure of disqualification to act as a Director of the Company as per the provision of Section 164 of the Companies Act, 2013.
  11. Fix the Financial Year of the Company.
  12. Appoint first auditor of the Company.
  13. Take note of subscribers to Memorandum
  14. Authorize the issue of Share Certificates to the Subscribers of Memorandum.
  15. Authorize the directors to file forms with MCA
  16. Approve Preliminary Expenses and preliminary contracts
  17. Authorize a Director to Maintain Books And Registers of the company at registered office.
  18. Any other Items with the Permission of the Chair

Hence, it must be made sure that the above-mentioned agendas are taken in to account in the first board meeting.

Sample Minutes of first Board Meeting

Sample Minutes of first Board Meeting
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Sample Minutes of first Board Meeting
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Board Meeting Minutes: A Guide

Board Meeting

The Board Meeting is a formal meeting of the top executives or directors of the company called to debate certain issues and problems and to make decisions. The meetings are to be held at definite times, at definite places.

Board Meetings require more planning and detailed preparation than the usual corporate events as such meetings are attended by the top corporate executives and leaders of the company. It must be distinguished from a general meeting, which is a meeting of the members (shareholders) of a company.

Number or Board Meetings

As per Section 173 (1) of the Companies Act, 2013, a newly incorporated Company must hold its first Board Meeting within a period of 30 days from incorporation.

Thereafter, a company is required to hold at least 4 Board Meetings in each financial year and ensure that the gap between two meetings does not exceed 120 days.

The quorum should be one-third of the directors or two directors, whichever is higher. Moreover, the participation of the directors by video conferencing or by other audio/visual means shall also be counted for the purposes of quorum.

Notice for Board Meeting

As per Companies Act Section 173 (4) a notice of at least seven days must be given in writing to every director at his/ her address registered with the company. Such notice shall be sent by hand delivery or by post or by electronic means.

A meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting. In case of absence of independent directors from such a meeting, decisions taken at the meeting shall be circulated to all the directors and shall be final only on ratification by at least one independent director if any.

Board Meeting Minutes

Minutes of a Board Meeting is a formal written record, in physical or electronic form. In short, board meeting minutes contain a summary of the matters discussed and decisions taken at such meeting. All companies registered in India, except OPC and Section 8 Company, are required to maintain minutes,

The minutes shall be maintained as per the manner prescribed in Section 118 of the Companies Act, 2013 and Secretarial Standard on Meetings of Board of Directors issued by the Institute of Company Secretaries of India (ICSI)

Minutes Book

Maintain a separate minutes book for each type of meeting. For instance, minutes book of Board Meetings, minutes book of General Meetings, etc.

Preserve the minutes permanently in the custody of the company secretary or any director duly authorized by the Board.

Board Meeting can be kept at the registered office or any other place as the Board may decide.

Content of the Minutes of Board Meeting

General Content

The Minutes shall contain:

  • Name of the company, serial number and type of meeting, date, day, venue and time of commencement of the meeting
  • Names of Directors present, whether physically or electronically, Company Secretary and invitees if any. In case the director is participating electronically, the location of such director
  • Record of the election of Chairman
  • Quorum of the meeting

Specific Content:

  • It shall contain a record of all appointments made at the meeting
  • Directors who sought and were granted leave of absence
  • Noting of the previous meeting minutes
  • Noting of the minutes of committee meetings, if any
  • Resolutions passed by way of circulation, if any, including dissent or abstention
  • The fact that an interested director did not participate or vote in the matter he/she was interested in
  • The views of the Directors particularly the Independent Director, if specifically insisted upon by such Directors
  • If any Director has not participated in any Agenda items
  • The fact of the dissent and the name of the Director who dissented from the Resolution or abstained from voting
  • Ratification by Independent Director or a majority of Directors, in case of Meetings held at a shorter Notice
  • Consideration of any other item than those included in Agenda
  • The time of commencement and conclusion of the Meeting

Recording of Minutes Board Meeting

  • Minutes shall contain a fair and correct summary of the proceedings of the Meeting.
  • Write minutes in clear, concise and plain language
  • Give a reference to any modified or superseded resolutions or decisions.
  • Minutes of the preceding meeting shall be noted at the Board Meeting held immediately following the date of entry of such Minutes in the Minutes Book

Finalization of Minutes of Board Meeting

Circulate the draft within 15 days of the conclusion of the meeting for comments of the Directors.

Minutes can be circulated by hand, speed post, registered post, courier, e-mail, or by any other recognised electronic form.

Entry in Minutes Book

  • Enter the minutes in the Minutes Book within 30 days from the conclusion of a meeting.
  • A Company Secretary or a person authorised by the Board shall enter the date of minutes.
  • Minutes shall not be altered except with the express approval of the Board.

Signing of Minutes of Board Meeting

The Chairman of the meeting or of the succeeding meeting shall initial each page of minutes book and sign and date the last page.

Moreover, the Chairman shall initial each page and sign and append date and place on the last page of the minutes.

Within 15 days of signing, minutes shall be circulated to all the Directors.

Points to remember

  • Consecutively number the pages of the Minutes Books shall.
  • Moreover, minutes shall not be pasted or attached to the Minutes Book or tampered with.
  • Minutes shall be written in third person and past tense. Whereas, the resolutions shall be written in the present tense.

Examples

Some items for which a Board Meeting is required to be held are:

What are the prerequisites for the board meeting?

The following are the prerequisites for a Board Meeting:
– The notice of the meeting shall provide all the necessary details of the meeting. Including the option available through video conferencing mode and other details that enable the directors to participate through video conferencing.
– If a director wishes to participate via video conferencing, then he/she should inform before-hand to the Chairperson or the Company Secretary of the company. This is done so that the company can make suitable arrangements for the same.

What is the frequency of the Board Meeting?

First board meeting: Every company is required to conduct its first board meeting within 30 days of incorporation
Subsequent board meetings: After this, the company is required to conduct at least 4 board meetings within 1 year. The time period between each meeting should not be less than 120 days.

What is the quorum of the Board Meeting?

1. In case the meeting is not held due to quorum (minimum number of members), then the meeting shall be held on the same date, same time, same place next week (not being a national holiday).
2. But if the number of directors is below quorum, then the remaining directors may hold the meeting for purposes given below:
a. To call a general meeting
b. To increase the number of directors
c. Or if the interested director exceeds or equals to 2/3rd of the remaining directors, then at least 2 should be the quorum

Board Meeting Notice : Reclassification of Shares

A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters.

Share class or share classification are different types of  shares in company stock that have different levels of voting rights The different categories of shares are as follows:

  1. Ordinary Shares
  2. Deferred Ordinary Shares
  3. Non-Voting Ordinary Shares
  4. Redeemable Shares
  5. Preference Shares
  6. Cumulative Preference Shares
  7. Redeemable Preference Shares

Most companies start by just having one type of shares in the form of an ordinary share class.  These will typically carry equal rights to voting, capital, and dividends. There are various reasons as to why a Company would want to have different classes of shares:

  • To attract investment
  • To push dividend income in a certain direction
  • To remove (or enhance) voting powers of certain individuals
  • To motivate staff (to remain as employees)

There are two ways to reclassify the shares. One of the methods involves the alteration in the Article of Association (AOA) and the other involves no alteration in the AOA. If there is a requirement of Alteration of Article of Association (AOA), the following steps have to be followed:

  1. Call a Board Meeting to alter the clause in the AOA
  2. Hold a General Meeting to pass the resolution for change in the Capital clause of AOA
  3. File Form MGT-14 with the Registrar along with the requisite filing within 30 days of passing the special resolution
  4. File Form SH-7 within 30 days of passing the Ordinary resolution

Thus, review your Board Meeting Minutes immediately after the meeting. When your board meeting minutes are complete and finished, make sure they are distributed to board members as soon as possible. Once the minutes are approved by a vote of the members during the board meeting, they become part of the official record of the organization. It’s important that a copy of all minutes are kept in one place.


FAQs

What are the reasons for which a Company would classify their shares?

A Company may classify their shares to:
-Attract investment
-Push dividend income in a certain direction
-Remove (or enhance) voting powers of certain individuals
-Motivate staff (to remain as employees)

Do the Directors of the Company have the authority to allot the new shares?

Directors of Private Companies with only one class of share do not need an express authority from the shareholders before they allot new shares.  They can simply allot new shares, subject to the Companies Act and the Articles of Association (AOA).

What are the steps involved to allot shares?

The following steps can be followed in order to allot shares:
– Preparing a form for subscribers
– The subscribers return the completed form with payment
– Hold a board meeting to approve the applications for new shares via board resolution, and produce a minute of the meeting
– Issue share certificates
– Complete a return of allotment via Companies House Form SH-01
– Update the company’s statutory books, and, if the company maintains one, the register of allotments

Extraordinary General Meeting: Consent Letter From Shareholders

An Extraordinary General Meeting (EGM) is unlike the Annual General Meeting (AGM). An AGM is a mandatory yearly gathering of a company’s interested shareholders. However, an EGM refers to any shareholder meeting called by a company other than it’s scheduled annual meeting. It is held when some urgent issue related to the company arises or any situation of crisis and it requires the input of all its senior executives and the Board.

When can an Extraordinary General Meeting be called?

The members/shareholders of a company can call for an EGM. However, only certain members with a significant stake in the company are allowed to call for an EGM. They are listed in the Companies Act,2013 as follows:

  • In the case of a company having a share capital, members holding not less than one-tenth of such paid-up capital of the company that carry voting rights in regard to that matter as on the date of depositing the requisition;
  • In the case of a company not having a share capital, members holding not less than one-tenth of the total voting power in regard to that matter as at the date of deposit of the requisition.
  • EGM called by Board.  Upon the receipt of a valid requisition, the Board has a period of 21 days to call for an EGM. The EGM must be then held with 45 days from the day of the EGM being called.
  • EGM called by the requisitionists – In case the Board fails to call for an EGM, it can be called for by the requisitionists themselves during a period of 3 months from the day the requisition was deposited. If the EGM is held within this specified period of 3 months, it can be adjourned to any day in the future after the 3 months.

Hence, a notice period of 21 days must be given to the members. However, there is an exception to this rule. Where if 95% of the voting members’ consent is a given, the EGM can be held at a shorter notice.

The following number of members is required for a quorum unless stated otherwise in the Company Article.

  1. In the case of a public company: five members personally present; and
  2. In the case of any other company: two members personally present

The shareholders are to give their consent for holding the Extraordinary General Meeting at Shorter Notice.

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FAQs

Who can call an EGM?

An EGM can be called by the following members:
– Committee member (if approved by the majority of voting committee members) or
– A written request signed by at least 25% of lot owners or their representatives or
– A person authorized by an adjudicator’s order

How many days notice is required for an EGM?

The minimum full period of notice for all meetings is 14 days, even if a special resolution is to be proposed, except for the AGM of a PLC, which is 21 days. The company’s articles may require a longer period.

When is a special resolution passed?

A special resolution is a resolution of the company’s shareholders which requires at least 75% of the votes cast by shareholders in favor of it in order to pass. Where no special resolution is required, an ordinary resolution may be passed by shareholders with a simple majority of more than 50% of the votes cast.

Board Resolution: Reclassification of Shares

An extraordinary general meeting (EGM) is a meeting other than a company’s Annual General Meeting (AGM). An EGM is also called a special general meeting or emergency general meeting. An EGM is usually called to deal with any of the following situations:

  1. The removal of an executive
  2. A legal matter
  3. Any matter that can’t wait until the next shareholders meeting

An EGM can be carried out on any day including holidays, unlike the AGM. An EGM can be called by the board on the requisition of shareholders, requisitionists, or tribunal.

Hence, in accordance with the Companies Act, 2013, a limited company having a share capital may alter its memorandums in the general meeting with regard to its authorized share capital if it is authorized by its articles.

Share class or share classification are different types of  shares in company stock that have different levels of voting rights The different categories of shares are as follows:

  1. Ordinary Shares
  2. Deferred Ordinary Shares
  3. Non-Voting Ordinary Shares
  4. Redeemable Shares
  5. Preference Shares
  6. Cumulative Preference Shares
  7. Redeemable Preference Shares
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FAQs

What are the reasons for which a Company would classify their shares?

The various reasons for which a Company would classify their shares are given as follows:
– Attract investment
– Push dividend income in a certain direction
– Remove (or enhance) voting powers of certain individuals
– Motivate staff (to remain as employees)

Who can call an Extraordinary General Meeting?

An extraordinary general meeting can be called by a:
– Committee member (if approved by the majority of voting committee members) or,
– A written request signed by at least 25% of lot owners or their representatives or,
– A person authorized by an adjudicator’s order

Do the Directors of the Company have the authority to allot the new shares?

Directors of Private Companies with only one class of share do not need an express authority from the shareholders before they allot new shares.  They can simply allot new shares, subject to the Companies Act and the Articles of Association (AOA).

Extraordinary General Meeting: Approval of Issue of Shares

An Extraordinary General Meeting (EGM) is a meeting other than a Company’s Annual General Meeting (AGM). An EGM is also called a special general meeting or emergency general meeting. The only time shareholders and executives meet are during a Company’s annual general meeting, which usually occurs at a fixed date and time. The extraordinary general meeting is used as a way to meet and deal with urgent matters that arise in between the annual shareholders’ meetings. An EGM might be called to deal with any of the following:

  1. The removal of an executive
  2. A legal matter
  3. Any matter that can’t wait until the next shareholders meeting

The Extraordinary General Meeting must be held 21 days from the date of issue of the notice. The meeting is called for deciding about allotment of shares. The Board of Directors assigns a committee of Directors known as the Allotment Committee. The allotment committee would then decide about the allotment of shares.

Once allotment committee provides its report with respect to allotment of shares, the Board then approves such a report and then passes the resolution for allotting shares to the respective applicants.

FAQs

What are voting shares?

Voting shares are shares that give the stockholder the right to vote on matters of corporate policymaking. Owning voting shares also allows a vote on who should be on the company’s Board of Directors.

What is the difference between the Annual General Meeting and the Extraordinary General Meeting?

An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s interested shareholders. At an AGM, the directors of the company present an annual report containing information for shareholders about the company’s performance and strategy.

An Extraordinary General Meeting (EGM) refers to any shareholder meeting called by a company other than it’s scheduled annual meeting.

What is the meaning of Blockholder?

A block holder is the owner of a large block of a company’s shares and/or bonds. In terms of shareholding, these owners are often able to influence the company with the voting rights awarded with their holdings.

Board Meeting: Notice for Holding a Board Meeting at Short Notice

A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters. Notice can be given out for Holding a Board Meeting.

What should be done before sending Notice for Holding a Board Meeting?

A notice is required to be sent to the Directors to intimate the date of the meeting. Furthermore, the agenda of the meeting should also be clearly mentioned in the notice. Additionally, the notice should be intimated to the Board of Directors at least 7 days prior to the date of the Board Meeting. However, if the meeting needs to be conducted at shorter notice, a resolution must be passed and recorded as below:

Thus, review your Board Meeting Minutes immediately after the meeting. When your board meeting minutes are complete and finished, make sure they are distributed to board members as soon as possible. Once the minutes are approved by a vote of the board during the next board meeting, they become part of the official record of the organization. It’s important that a copy of all minutes are kept in one place.

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FAQs

When should a board meeting at shorter notice be called?

A board meeting at shorter notice may be called by the president of the association, or by any two directors other than the president if there are circumstances that could not have been reasonably foreseen which require immediate attention and possible action by the board, and which of necessity make it impracticable to provide notice.

What happens if the notice of the Board Meeting is not intimated to the Board of Directors?

In case of failure to give the notice of the Board Meeting as required u/s 173, every officer of the company whose duty is to give notice shall be liable to a penalty of INR 25,000.

What are the requirements for conducting a Board Meeting?

In terms of Section 174(1) of the Companies Act, 2013, the quorum for a Board Meeting shall be:
– One-third of its total strength of directors who are in office, or
– Two directors, whichever is higher.

Annual General Meeting (AGM) Minutes

Every Company, other than One Person Company (OPC), must hold a general meeting in each year apart from other meetings as Annual General Meeting (AGM). The AGM must be held within six months from the closing date of the Financial Year. Furthermore, a notice of 21 days has to be sent to all members.

The Directors of the Company present an annual report containing information for shareholders about the Company’s performance and strategy. Apart from presenting an annual report, the shareholders with voting rights vote on current issues. These issues are as appointments to the Company’s Board of Directors, executive compensation, dividend payments, and selection of auditors.

In large companies, this meeting is the only time during the year when shareholders and executives interact. Furthermore, shareholders who do not attend the meeting in person usually vote by proxy. Additionally, there is often time set aside for shareholders to ask questions to the Directors of the Company.

There are various rules governing the Annual General Meeting.

  1. Memorandum of Association
  2. Articles of Association
  3. Corporate bylaws

Such rules contain basic guidelines or provisions detailing how far in advance shareholders must be notified of where and when an AGM will be held. In most AGM meetings, the following topics are required to be discussed:

  • Minutes of the Previous Meeting:
    • The minutes of the previous year’s AGM must be presented and approved.
  • Financial Statements:
    • The company presents its annual financial statements to its shareholders for approval.
  • Ratification of Director’s actions:
    • The shareholders approve and ratify (or not) the decisions made by the board of directors over the previous year. This often includes the payment of a dividend.
  • Election of Board of Directors:
    • The shareholders elect the board of directors for the upcoming year.

FAQs

What happens if a Company does not hold an Annual General Meeting (AGM)?

If a Company does not hold an AGM, as per Section 96, the Company and it’s every officer come in the Category under Section 99 of the Company Act, 2013 and are punishable with fine which may extend to INR 1 Lakh and in case of continuing default, it may extend to INR 5000 for every day.

Is it possible to extend the date of the AGM?

The Registrar of Companies (ROC) may extend the period within which the AGM (not being the first AGM) shall be held. The extension should not be exceeding 3 months under section 96(1). Moreover, an application for extension of the first AGM will not be accepted. Application for extension of time should be submitted electronically in e-form GNL-1.

What is the difference between the AGM and an Extraordinary General Meeting?

An Annual General Meeting (AGM) is a mandatory yearly gathering of a company’s interested shareholders. At an AGM, the directors of the company present an annual report containing information for shareholders about the company’s performance and strategy.

An Extraordinary General Meeting (EGM) refers to any shareholder meeting called by a company other than it’s scheduled annual meeting.

Board Meeting : Signing of the Audit Report by the Auditor

A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters.

As per the Companies Act, every Company needs to get their books of accounts audited by an independent auditor annually. An auditor is appointed/re-appointed every year in the AGM.

An auditor, after completing audit issues the audit report to the shareholders of the Company stating the opinion on the activities carried out by the business during the Financial Year.

Thus, review your Board Meeting Minutes immediately after the meeting. When your board meeting minutes are complete and finished, make sure they are distributed to board members as soon as possible. Once the minutes are approved by a vote of the members during the board meeting, they become part of the official record of the organization. It’s important that a copy of all minutes are kept in one place.

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FAQs

What is the audit report date?

The auditor should date the audit report no earlier than the date on which the auditor has obtained sufficient and appropriate evidence to support the auditor’s opinion.

What should be the date of the Director’s report?

The Directors’ Report shall be made out no less than 14 days before the date of the Annual General Meeting (AGM). The report shall be made in accordance with a resolution of the directors, specifying the day on which it was made out and be signed by at least two directors.

Is the Board report and the Director report the same?

The Directors’ report is produced by the Board of Directors and outlines the financial state of the Company. The other reports which make up a Company’s statutory accounts include a balance sheet, a profit, and loss statement and, in some cases, an auditor’s report.

Board Meeting : Allotment of Shares

A board meeting is a formal gathering of a Board of Directors. Most of the organizations, being public or private, profit or non-profit, are ultimately governed by a body commonly known as Board of Directors. The members of this body cyclically meet to discuss strategic matters. A Board Meeting can be called for discussing the topic of allotment of shares.

The Board of Directors has to assign a Committee of Directors known as the Allotment Committee. Once allotment committee provides its report with respect to allotment of shares, the Board then approves such a report and then passes the resolution for allotting shares to the respective applicants.

Once shares are allotted by the allotment committee, the company secretary sends the letters of allotment to the respective members. The allotment letter refers to a letter that notifies the applicant that the company has allotted a certain number of shares to him. This letter of allotment is considered as the share certificate until the issuance of the final certificate.

The company secretary needs to inform all the shareholders that share certificates are ready and would be delivered in exchange for allotment letters and bankers’ receipt confirming payment of the allotment money. The public notice should be issued for the general information of the members.

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FAQs

What does the allotment of shares mean?

Share allotment is the creation and issuing of new shares, by a Company. New shares can be issued to either new or existing shareholders. Share allotment can have implications for any existing shareholders’ share proportion. Typically, new shares are allotted to bring on new business partners.

What are the types of shares

– Ordinary shares. These carry no special rights or restrictions
– Deferred ordinary shares
– Non-voting ordinary shares
– Redeemable shares
– Preference shares
– Cumulative preference shares
– Redeemable preference shares

Who decides the share price?

At the most fundamental level, supply and demand in the market determine stock price. Price times the number of shares outstanding (market capitalization) is the value of a company.