Think of minutes as the official diary of a company's meetings. Every time the Board sits down to make decisions, or shareholders gather for an AGM, or a resolution is passed by postal ballot — someone has to write it all down, get it signed, and lock it in a numbered register within 30 days. That's Section 118 in a nutshell.
Here's the structure you must remember. Every company — private or public — must maintain minutes for: (1) general meetings of shareholders or creditors, (2) Board meetings, (3) committee meetings, and (4) resolutions passed by postal ballot. The minutes book must have consecutively numbered pages (so no one can slip in or tear out a page). The minutes must be a fair and correct summary — not a verbatim transcript, not a selective highlight reel. Appointments made at any meeting must be included. For Board meetings specifically, the minutes must name every director present, and also note any director who dissented or did not concur with a resolution — this is the accountability mechanism.
The Chairman has absolute discretion to exclude three types of content: anything defamatory, anything irrelevant or immaterial, or anything detrimental to the company's interests. Once properly maintained, minutes serve as legal evidence of the proceedings — the meeting is presumed to have been duly called and held, and all appointments (directors, KMP, auditors, company secretary) are presumed valid. The penalty for non-compliance is ₹25,000 on the company and ₹5,000 on every defaulting officer. Tampering with minutes is a criminal offence — up to 2 years imprisonment plus a fine between ₹25,000 and ₹1,00,000. Also note: companies must follow Secretarial Standards issued by ICSI (approved by the Central Government) for both general and Board meetings. This is examined frequently as a 4–5 mark question, especially the penalty provisions and the Chairman's discretion.
📊 Worked example
Example 1 — Penalty Calculation
Rajesh & Co. Pvt. Ltd. held a Board meeting on 1st January 2025. The minutes were not prepared and signed at all. The company has 3 directors, of whom 2 are in default (the MD and the Company Secretary who is also an officer in default). Calculate the total penalty.
Working:
- Penalty on company = ₹25,000
- Penalty on defaulting officer 1 (MD) = ₹5,000
- Penalty on defaulting officer 2 (CS) = ₹5,000
- Total penalty = ₹25,000 + ₹5,000 + ₹5,000
Answer: Total penalty = ₹35,000
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Example 2 — Tampering Scenario
Mr. Arjun, a director of Sunrise Technologies Ltd., secretly altered the minutes of the AGM held on 15th March 2025 to remove a resolution that had been passed against his interests. He is caught and prosecuted. What is his punishment?
Working:
- Section 118(12) applies — tampering with minutes
- Imprisonment: up to 2 years
- Fine: minimum ₹25,000, maximum ₹1,00,000 (both fine and imprisonment apply)
Answer: Mr. Arjun can be imprisoned for up to 2 years AND fined between ₹25,000 and ₹1,00,000. Note this is a criminal punishment, not just a civil penalty.
⚠️ Common exam mistakes
- Students confuse the 30-day rule: Minutes must be prepared and signed within 30 days of the meeting — not just drafted. The clock starts from the date of conclusion of the meeting, not the date the Chairman signs.
- Forgetting dissenting directors in Board minutes: Many students write that Board minutes only need names of directors present. Wrong — you must also record the names of directors who dissented from or did not concur with any resolution. This is specifically asked in exams.
- Mixing up penalties: The ₹25,000 penalty is on the company; ₹5,000 is per defaulting officer. Students often apply a single flat penalty to everyone. Write both clearly in exam answers.
- Ignoring Secretarial Standards: Section 118(10) requires companies to follow ICSI Secretarial Standards for meetings. Don't skip this — examiners expect it to be mentioned.
- Thinking Chairman's discretion is unlimited: The Chairman can exclude content only on three specific grounds (defamatory, irrelevant, or detrimental to company). Students write 'the Chairman can exclude anything he wants' — that's wrong. It must fall within one of these three grounds.
📖 Bare Act text — Section 118, Companies Act 2013
(click to expand)
(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—
(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.
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