Companies Act Section 118 — Minutes of proceedings of general meeting, meeting of Board of Directors and other meeting and resolutions passed by postal ballot
CHAPTER VII MANAGEMENT AND ADMINISTRATION
Commercial / Corporate
Summary
Sub-section (1) requires every company to prepare minutes of the proceedings of every general meeting of any class of shareholders or creditors, every resolution passed by postal ballot, and every meeting of its Board of Directors or of any committee of the Board. These minutes must be prepared and signed in the manner prescribed, and kept within thirty days of the conclusion of the meeting or the passing of the resolution by postal ballot, in books meant for that purpose with consecutively numbered pages.
Sub-section (2) states that the minutes of each meeting must contain a fair and correct summary of the proceedings that took place at that meeting.
Sub-section (3) provides that all appointments made at any of the meetings mentioned in sub-section (1) must be included in the minutes of that meeting.
Under sub-section (4), for a meeting of the Board of Directors or a committee of the Board, the minutes must also contain two things. Clause (a) requires the names of the directors present at the meeting to be recorded. Clause (b) requires, for each resolution passed at the meeting, the names of any directors who dissented from or did not concur with the resolution.
Sub-section (5) says that the minutes must not include any matter which, in the opinion of the Chairman of the meeting, falls under any of three grounds. Clause (a) covers matter that is or could reasonably be regarded as defamatory of any person. Clause (b) covers matter that is irrelevant or immaterial to the proceedings. Clause (c) covers matter that is detrimental to the interests of the company.
Sub-section (6) gives the Chairman absolute discretion regarding whether to include or not include any matter in the minutes on the grounds specified in sub-section (5).
Sub-section (7) provides that minutes kept in accordance with this section serve as evidence of the proceedings recorded in them.
Sub-section (8) states that if minutes have been kept in accordance with sub-section (1), then until the contrary is proved, the meeting is deemed to have been duly called and held, all proceedings at it are deemed to have duly taken place, and resolutions passed by postal ballot are deemed to have been duly passed. In particular, all appointments of directors, key managerial personnel, auditors, or company secretary in practice are deemed to be valid.
Sub-section (9) prohibits any document purporting to be a report of the proceedings of any general meeting of a company from being circulated or advertised at the company's expense, unless it includes the matters required by this section to be contained in the minutes of the proceedings of such meeting.
Sub-section (10) requires every company to observe secretarial standards with respect to general and Board meetings as specified by the Institute of Company Secretaries of India, constituted under section 3 of the Company Secretaries Act, 1980, and approved by the Central Government.
Sub-section (11) provides that if any default is made in complying with the provisions of this section in respect of any meeting, the company is liable to a penalty of twenty-five thousand rupees, and every officer of the company who is in default is liable to a penalty of five thousand rupees.
Sub-section (12) states that if a person is found guilty of tampering with the minutes of the proceedings of a meeting, that person is punishable with imprisonment for a term that may extend to two years, and with a fine that shall not be less than twenty-five thousand rupees but may extend to one lakh rupees.
Official Text
(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.
(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— 4. Ins. by s. 9, ibid. (w.e.f. 29-5-2015).
(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.
(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.