All companies must keep records of important decisions made including companies where the company has only one director. Before electronic records, minutes of a meeting would have been recorded in a physical minute book.
Companies have moved away from keeping a physical minute book and this has resulted in companies not formally recording decisions or leaving minutes in a partial completed state in an email.
Why must a company keep records of decisions made?
Under the UK Companies Act 2006 section 248, companies are required to keep records of meetings/written resolutions of decisions made. Authorities including HMRC or Auditors can also request to review minutes/written resolutions when inspecting the records of the Company. If the company is sold solicitors will also request so see a copy of all minutes/written resolutions and will check if the relevant authority has been obtained to approve any changes to the company.
What decisions should be recorded in minutes/written resolutions?
All changes to the structure of the company including changes to the directors, shareholders, share structure and registered office address change. Shareholders’ resolutions may also be required when changes are made to the shares or share structure. Any important financial decisions including opening bank accounts, recording details of loans, approving accounts and dividend payments.
Any other important decisions that is worthy of consideration by the board of directors or recording by the sole director.
Key requirements when recording decisions via a director’s board meeting or a sole director’s written resolution
- Companies, where the company has a sole director, must record important decisions by producing a sole director written resolution.
- Companies that have more than one director can either record decisions via a board meeting or a written resolution. If the company chooses to have a board meeting it is important that the quorum has been reached.
- The minutes or written resolutions should accurately record the proceedings and decisions taken during the meetings.
- Whilst no legal format is required to record the details of the meeting or written resolution it is important to state what decisions were resolved.
- The minutes or written resolution must be kept for at least 10 years from the date of the meeting.
If you would like more information or any advice on this article, then please contact us by emailing solutions@ellacotts.co.uk or call us on 01295 250401.
Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
