Maintenance of Registers and Minutes in a company

The Companies Act, 2013, mandates that every company maintain statutory registers and minutes to document its operations, decisions, and compliance with legal requirements. These records ensure transparency, accountability, and efficient management while serving as evidence in legal or financial audits.

What Are Statutory Registers?

Statutory registers are official records that every company is legally required to maintain. These registers capture essential details about the company’s stakeholders, securities, and operations.

In this article, we will cover the mandatory compliance in terms of maintaining statutory registered and minutes under the Companies Act, 2013 by CA Manish Mishra.

Types of Statutory Registers Under the Companies Act, 2013

- Register of Members (Section 88)

• Details Recorded:
  • Names and addresses of shareholders.
  • Details of shares held and paid-up capital.
  • Date of becoming or ceasing to be a member.
• Purpose: Tracks ownership of the company.

- Register of Directors and Key Managerial Personnel (KMP) (Section 170)

• Details Recorded:
  • Names, addresses, and designations of directors and KMPs.
  • Appointments and resignations.
  • Remuneration and shareholding of directors.
• Purpose: Monitors management roles and responsibilities.

- Register of Charges (Section 85)

• Details Recorded:
  • Loans or charges created on company assets.
  • Details of lenders and terms of the charge.
• Purpose: Tracks the company’s financial liabilities.

- Register of Debenture Holders (Section 88)

• Details Recorded:
  • Names, addresses, and debenture allotment details.
  • Amount paid and due on debentures.
• Purpose: Documents debenture issuance and holders.

- Register of Contracts or Arrangements (Section 189)

• Details Recorded:
  • Contracts involving related parties.
  • Terms and conditions of the arrangement.
• Purpose: Ensures transparency in related-party transactions.

- Register of Loans, Guarantees, and Securities (Section 186)

• Details Recorded:
  • Loans given, guarantees issued, and securities provided.
  • Details of beneficiaries and amounts involved.
• Purpose: Tracks financial outflows and commitments.

- Register of Investments (Section 186)

• Details Recorded:
  • Investments made by the company.
  • Securities purchased and details of parties involved.
• Purpose: Monitors investment activities.

- Register of Renewed or Duplicate Share Certificates (Rule 6, Companies (Share Capital and Debentures) Rules, 2014)

• Details Recorded:
  • Issuance of renewed or duplicate certificates.
  • Reasons for renewal and related approvals.
• Purpose: Maintains the integrity of share capital records.

What Are Minutes?

Minutes are written records of the proceedings of meetings held by the company. These include:

- Board Meetings

- General Meetings (Annual and Extraordinary)

- Committee Meetings

Types of Minutes Under the Companies Act, 2013

- Board Meeting Minutes (Section 118)

• Details Recorded:
  • Discussions and decisions of the Board of Directors.
  • Resolutions passed during the meeting.
• Timeframe for Recording: Within 30 days of the meeting.
• Purpose: Serves as a record of strategic decisions and approvals.

- General Meeting Minutes (Section 118)

• Details Recorded:
  • Agenda, voting outcomes, and resolutions passed.
  • Details of shareholders attending the meeting.
• Timeframe for Recording: Within 30 days of the meeting.
• Purpose: Ensures transparency in shareholder decisions.

- Committee Meeting Minutes

• Details Recorded:
  • Decisions and resolutions of specialized committees (e.g., audit or remuneration committees).
• Purpose: Records decisions made by sub-groups of the board.

How to Maintain Statutory Registers and Minutes

- Format and Location:

• Registers and minutes can be maintained in physical or electronic form.
• They must be kept at the company’s registered office.

- Authentication:

• Registers should be signed by the company secretary or a director.
• Minutes must be signed by the chairperson of the meeting.

- Inspection and Accessibility:

• Statutory registers are open for inspection by shareholders, auditors, and regulatory authorities.
• Copies of minutes are provided to stakeholders upon request.

- Timeframe for Retention:

• Statutory registers and minutes must be preserved for a minimum of 8 years, though some records must be retained indefinitely.

Importance of Statutory Registers and Minutes

- Legal Compliance: Adherence to the Companies Act avoids penalties and legal consequences.

- Transparency: Fosters trust among shareholders, investors, and stakeholders.

- Evidence in Disputes: Provides proof in case of regulatory scrutiny or litigation.

- Corporate Governance: Demonstrates professionalism and accountability.

Consequences of Non-Compliance

- Penalties for Companies: Fines ranging from ₹25,000 to ₹1,00,000 depending on the default.

- Penalties for Officers: Fines or imprisonment for directors and responsible officers in serious violations.

- Loss of Credibility: Non-compliance can harm the company’s reputation and stakeholder trust.

Conclusion

Statutory registers and minutes are critical components of a company’s compliance framework under the Companies Act, 2013. Proper maintenance ensures transparency, smooth governance, and alignment with legal obligations, while also safeguarding the company’s interests in audits or disputes. Regular updates and professional oversight are essential for seamless corporate functioning. Need help, feel free to contact us.