By Gila Halleli-Weiss

Overview

Board of Directors (or  “the Board”) and shareholder minutes and written consents are your official, legal records of what was discussed at Board and shareholder meetings and of their decisions. These are important because:

• The Board and shareholders are required to meet periodically (the frequency of meetings will depend based on where you are incorporated). The minutes are a record that the meeting occurred.
• The Board’s role is to provide management and oversight of the company, its management and its activities. In order for that to happen, you (aka company management) need to let them know what the company is doing. The minutes are a legal record that both of you did your jobs.
• The Board and/or shareholders are required to approve certain types of company activities. These will be listed in the company Articles of Association.  The minutes and consents are a legal record that the Board and shareholders were informed of the activity and approved it.

Golden rules for minutes and written consents?

• Always send copies of signed minutes and signed written consents to your legal counsel.
• Work Clean Stay Clean. File minutes and consents by year and then by date. If you have given the board supporting documents (e.g. a board deck or a list of option grants to approve) file that together with the minutes and consents. If discussions happen via email, save those as well.

Minutes

“Minutes of meetings” are simply a description of what happened and what was decided at the meeting.  It can be long and detailed or a brief summary.  The key thing is to make sure the minutes include: decisions made; next steps planned and identification of and updates on action items. Your legal counsel can assist by drafting this for you or by setting up a template you can use to draft on your own. For more detail on how to take minutes, Board Effect has a lovely article with clear step-by-step instructions.   (I like this one as well).

You should be taking minutes for each Board or Shareholder meeting and then signing off the chairman of the Board or Board Secretary on the minutes.  If you provide the Board/shareholders with supporting documentation for use during the meeting (a “board deck”) keep that together with the signed minutes.

Written Consent

A “Written Consent” is used to allow the Board, Shareholders or Board Committees to make decisions without a meeting. Unlike the case with physical meetings, this generally requires unanimous consent and signature (and not just signoff by a chairman). To make your life easier, check with your legal counsel to see if a response by email is acceptable where you are incorporated instead of actual signoff on the document, as that can speed up the signature collection process considerably.  If it is allowed, you may still need to update your Articles of Association to include that (a simple fix, though it does require Board approval).

Once you have all the signatures you can use tools such as PDF24 to combine the original document and all of the received signatures into one document.  Here as well, if you provided the Board or shareholders with additional information along with the consent (for example, a summary of the contract you want them to approve) keep that together with the signed written consent.  In addition, since the process is generally happening over email, you will want to hold onto relevant emails as well.  That can be done either by PDF’ing the emails and saving them together with the other documents or by simply categorizing your emails so that you can easily pull them up (e.g. “BOD 3.15” or “UWC 6.14 Loan Agreement”).