Minutes for Board of Directors

Minutes for Board of Directors

The minutes of a board meeting are crucial. This post looks at how minutes are valuable, both internally and externally, and outlines the general form that they should take. Finally, it provides a sample you can compare with your own minutes to be sure everything is covered.

Minutes for Internal Purposes

Internally, minutes serve to show exactly what the board has discussed and approved. This becomes crucial if there is dissent within the board, as the minutes should reflect what the board’s actual decisions are. If the minutes are not well kept it can be challenging to know what exactly has occurred. Specifically, people often change their mind about issues, and if good minutes don’t exist a board member may later claim the board did or did not act on a certain matter.

Minutes for External Purposes

Externally, minutes can be useful for several purposes:

  • Review by an attorney to determine a corporation’s legal position.
  • Banks often require proof of authority to open an account—minutes can reflect who has been given this authority.
  • Vendors may require similar proof of authority to conduct a transaction.
  • The courts may look to the minutes to decide if formalities have been followed; this relates to piercing the corporate veil.
  • There are several other ways that they can be used externally.

How to Take Good Minutes

If you are the secretary conducting the board meeting, you are generally responsible for preparing the minutes.Click Here for a sample of what the final minutes should include. It is a good idea to make sure that each item in the list below is addressed. The sample is based on what would typically occur at a first board meeting; however, keep in mind that every corporation has different requirements.

Good minutes include:

  • Who is at the meeting.
  • When the meeting takes place.
  • Where the meeting takes place.
  • Under what authority the meeting occurs.
  • What is discussed.
  • Any board action taken; specify what was voted on and who voted for what.

Note that the California Corporate Code Section 1500 contains some of the legal requirements on this topic.

If you are forming a board of directors and need specific guidance on what your minutes should include, or would like me to review your existing minutes to be sure they are adequate, please contact me.

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About the Author:

Mathew Auric
Mathew Auric is an attorney licensed to practice law in California.