A reminder that owners and directors of limited companies have a duty to record certain transactions and decisions they make in the form of written minutes. In some situations, this obligation extends to include the filing of forms with Companies House.

Section 248 of the Companies Act 2006 says:

  1. Every company must cause minutes of all proceedings at meetings of its directors to be recorded.
  2. The records must be kept for at least ten years from the date of the meeting.
  3. If a company fails to comply with this section, an offence is committed by every officer of the company who is in default.
  4. A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

To clarify, level 3 of the standard scale is £1,000.

Which begs the question, when do directors need to formalise meetings in this way?

Regular meetings are not mandatory unless required by a shareholders' agreement and/or articles of association (the company’s rule book), but it is recommended to convene board meetings to approve corporate changes and significant transactions. These could include major acquisitions or disposals, approving annual accounts, changing shareholdings, voting dividends or other changes to directors’ remuneration packages.

At these meetings minutes must be kept and as noted above, retained for at least ten years.

Source: New feed