Board minutes: 3 mistakes to avoid when drafting minutes of a board meeting (UK)

Board minutes are a legal requirement for every private limited company in the UK, and the Companies Act 2006 sets strict rules about them. Most of the problems I see with minutes come from the same three mistakes: writing them after the meeting rather than before, taking decisions in the wrong order, and never checking what the company's articles of association say about how a board meeting has to be run. This article explains each mistake and how to avoid it so that your minutes are legally valid and stand the test of time.

Are board minutes a legal requirement?

Yes. Board minutes are a legal requirement for all private limited companies, including companies with only one director. A sole director still holds board meetings, even if the meeting is just them sitting down and recording a decision, and the minutes still have to be kept.

The Companies Act 2006 sets out strict legal requirements regarding board minutes. One of them is that the minutes must be kept for at least 10 years. If your company has been making decisions without recording them, that is a gap in your statutory records, and it is one of the legal mistakes business owners make most often.

What are board minutes?

In short, board minutes are a document that reflects what has occurred in a meeting of the board of directors of a company. They record who was present, what was discussed and, most importantly, what was decided. For a step-by-step guide to the document itself, see how to draft board minutes.

Writing minutes after the meeting (mistake 1)

The first mistake is creating the board minutes after the board meeting has taken place.

This sounds counter-intuitive, because people assume minutes are a record written up afterwards. In practice, board minutes typically help the board of directors conduct their meeting. Prepared in advance, the minutes act as an agenda. They guide the discussion and make sure that you follow the correct order of decisions, which is the subject of the second mistake.

If you draft the minutes before the meeting, you walk in knowing what needs to be resolved, in what sequence, and what each resolution should say. If you draft them afterwards, you are reconstructing a conversation from memory and hoping the decisions were taken in a valid order.

Decisions in the wrong order (mistake 2)

The second mistake is taking decisions in the wrong order. The sequence of resolutions is not cosmetic; it can decide whether a resolution is valid at all.

Here is a common example. Suppose you are selling your company and you want to remove yourself as a director and appoint someone else in your place. What some people do is resolve to remove themselves first, and then resolve to appoint the new director.

That is a mistake. A company must always have a director. If you remove yourself first, there is a period of time, however short, in which the company has no director at all, and that makes the decision invalid.

The correct order in that example is:

• First, appoint the new director. The company now has two directors.
• Then remove yourself. The company is left with one director and has never been without one.

The same thinking applies to any sequence of decisions where one resolution depends on another already being in place. Preparing the minutes in advance is what lets you spot these dependencies before the meeting rather than after.

Not checking the articles (mistake 3)

The third mistake is not checking your company's articles of association before you hold the meeting.

Your articles of association will inevitably contain provisions about how to conduct a proper and valid board meeting. There will be formalities, such as what the quorum is: how many directors must be present for the board meeting to be valid. If the quorum is not met, the meeting is not valid, and neither are the decisions taken at it, no matter how carefully the minutes were written.

The articles may also deal with how meetings are called, how directors vote and what happens if a director has an interest in the matter being decided. None of this is optional, because the articles are the rules the company has adopted for itself. If you have never read yours, what are articles of association explains what they are and what the model articles contain.

Next steps

Before your next board meeting, read the relevant provisions of your articles, draft the minutes in advance with the resolutions in the right order, and check that enough directors will be present for the meeting to be quorate. Afterwards, keep the signed minutes with the company's records for at least 10 years. If you are dealing with a sensitive sequence of decisions, such as changing directors as part of a sale, have a corporate solicitor check the order before you sign anything.