Meetings are an integral part of professional life, and it is important to take minutes of every meeting. The minutes are very important for participants present and also for those absent during a meeting.
The board of directors of the company (the Board) are responsible for its governance and operation. Every company must prepare and record minutes of all proceeds at meetings of its Board (the Board Meetings) and of meetings of its shareholders (the General Meetings).
The minutes are drafted in a specific format and set out what was discussed, deliberated, considered, agreed and confirmed in the meeting. The minutes also record the actions agreed upon during the meeting. The minutes of Board Meetings are a valuable tool if someone wants to review how the Board came to a particular conclusion.
Minutes should be prepared promptly, circulated for review and comments, and then approved at the next succeeding meeting before being formally signed by the Chair of the Board Meeting. It can be argued that without proper meeting minutes, it is essentially as if the meeting did not occur at all.
So, why are the minutes from the meeting important?
Under Article 98 of the Companies (Jersey) Law 1991 (the Companies Law), Jersey companies are required to keep minutes of the Board Meetings. The Companies Law requires minutes of the Board Meetings to be taken and kept for 10 years from the date of the meeting. A failure to meet this statutory obligation is a criminal offence on the part of the company itself, with every director in default.
Well-drafted minutes give a professional impression of the company’s management during critical discussions around strategy or regulatory requirements and for decisions such as investment negotiations or potential sales. The minutes of the Board Meetings can provide evidence that the directors are discharging their statutory fiduciary duties to “act honestly and in good faith with a view to the best interests of the company” and that they are exercising “the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances”. They may also provide evidence of regulatory requirements being met and evidence of other specific requirements (for example, financial) being met, particularly on subsequent insolvency.
Prima facie evidence
Once signed by the Chair, the minutes of the Board Meeting are prima facie evidence of the proceedings of the Board Meetings. Appropriate, high-quality minutes of the Board Meeting will demonstrate beyond any doubt what was decided in the meeting and how the board decision was made, bringing peace of mind to the Board in the event that any board decisions were to be questioned or disputed in the future. The minutes shall evidence the Board’s decisions on behalf of the company to enter into transactions and execute documents. Minutes represent the actions of the Board, and are considered legal documents by auditors, and the courts. It can be argued that if an action isn’t in the minutes, it didn’t happen.
Jersey has introduced the Taxation (Companies – Economic Substance) (Jersey) Law 2019 (the Substance Law), which came into force on 1 January 2019. To satisfy the requirement to be directed and managed in Jersey, the Substance Law requires a company to ensure that:
- its Board of directors meets in Jersey at an adequate frequency having regard to the amount of decision-making required at the board level;
- at each board meeting, there is a quorum of directors physically present in Jersey;
- the minutes of each board meeting record the strategic decisions made by the Board at that meeting;
- its directors have the necessary knowledge and expertise to discharge the duties of the Board; and
- the minutes of all board meetings and the records of the company are kept in Jersey.
The minutes can serve as due diligence in relation to enquiries carried out by third parties on, for example, a sale or a listing of a company or on insolvency by a liquidator etc.
The minutes set out the matters arising (each, an Action), and a separate Action log should also be kept. Preparing and promptly circulating the minutes and the Action log help drive forward each Action. A prudent director tasked with carrying out an essential function on behalf of the company would want to see his authority confirmed at a Board Meeting of the company and evidenced by means of the minutes of that meeting.
In conclusion, the Board is responsible to ensure that minutes are prepared and drafted as an accurate record of the proceedings of the Board Meeting because:
- it is a legal requirement;
- they give a professional impression of the company’s management during critical discussions;
- in case of conflicts, they are useful to know what agreements were made
- it demonstrates substance (provided that the requirements under the Substance Law are met);
- the minutes confirm what was approved; and
- they also show who will do what and when.
How Virteffic can help your business
Virteffic Limited is an independent, privately owned business in the Channel Islands that provides secretarial support and administration services. Our virtual assistants specialise in drafting minutes, preparing board packs, and day-to-day administration services. The team consist of experienced, qualified professionals with hard-to-find skills and long experience in the regulated financial industry. We pride ourselves on being flexible, efficient, diligent, knowledgeable and discrete.
Simply put, we help businesses and charities by doing tasks they don’t know how to do, are too busy to do, don’t want to do, or that would be better outsourced.
We have become a trusted support firm that assists businesses of all sizes, including many of the larger regulated firms (funds and trust companies, wealth advisors and insurance companies), non-profit organisations, and charities. Our clients are based in Jersey and Guernsey, the Cayman Islands, and the UK.
How does it work?
Virteffic can assist as an extension to your on-site employees. Or as an alternate, more flexible solution to hiring a permanent administrator or secretarial officer. Using a virtual assistant means lower operational costs without compromising the quality of service. Our virtual assistants act efficiently and professionally with the utmost confidentiality, sometimes eliminating the need for staff members altogether. Virteffic is invested in every client that is taken on, and we will always do our utmost to deliver excellent services.
Our team can work securely in our Cyber Essentials validated secure Microsoft Office environment. Alternatively, you can give us access to your software technology (Citrix, Microsoft Office, VDI or another solution), allowing us to integrate seamlessly with your personnel and systems.
We will simply raise an invoice based on the agreed fee once the services have been performed or raise monthly invoices for longer engagements. As a virtual assistant is not an employee, there will be no additional charges that would be payable if you hired an administrator or secretarial officer. Virteffic is transparent with its pricing and fees, and a detailed timesheet is always provided with the invoice.
Visit the news and insights page on our website to discover what is new at Virteffic and learn more about our team and the services we provide. We also share our thoughts, tips and tricks with regard to minutes, meetings and corporate governance.
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