The law in California governing corporations requires that each corporation keep minutes of the proceedings of its shareholders and board of directors. Minutes must be kept in written form or in another form capable of being converted into clearly legible tangible form or in any combination of the foregoing. Usually, the corporate secretary is in charge of taking and maintaining the minutes. To conveniently retain all these records, corporations often keep a record or ”minute” book with separate sections for charter documents, bylaws, minutes of meetings of the board, committees of the board and shareholders.

The records of proceedings of shareholders and directors should be retained as permanent records of the corporation. If for convenience or assistance of the person preparing the final minutes, the preparer makes notes of the proceedings of a meeting or the proceedings are transcribed or recorded during the meeting, ordinarily those notes, transcriptions, and recordings should be destroyed pursuant to the corporation’s record retention program promptly after the minutes are in final form and signed or approved by those who customarily approve the final form of minutes.

Practices differ on the process for approval of minutes. Ordinarily the person taking the minutes will prepare at least a draft for review by the person chairing the meeting. After that review and any approval or revision, the minutes should be prepared for inclusion in the minute book. Although there is no legal requirement that the minutes of a directors’ meeting or directors’ committee meeting be approved by that body after their preparation, commonly such an approval is placed on the agenda for a subsequent meeting, at which time the minutes would either be approved or, if correction is needed, corrected, for final placement in the corporate records.

The final minutes ordinarily would be signed by the corporate secretary or other person who took the minutes and often also by the presiding officer. Except for closely held corporations, in which shareholders may wish to see corporate minutes, it is not usual to send shareholders copies of minutes either of shareholders’ meetings or of directors’ or committee meetings, although those records are open to shareholders’ inspection. If directors or shareholders act by written consent without a meeting, the consents and any related documents should be treated, filed, and retained as are minutes of meetings.

Minutes primarily serve the purpose of documenting the proper holding of a meeting and recording the actions taken at it, such as resolutions passed, officers appointed, directors elected, reports received and approved, or contracts or conveyances authorized. Thus, minutes ordinarily serve as the official record of actions taken by the board or a committee of the board.

In general, minutes are intended to be a record of what is done, not of what is said or discussed, and therefore general discussions at the meetings need not be recorded in detail, although frequently a discussion of significant matters is summarized in the minutes. The minutes should be as concise and accurate as possible. The names of the persons presenting resolutions or making or seconding motions are not ordinarily of importance, but in the case of board or board committee meetings, the names of those voting in favor of an action, those opposed, and those abstaining when the vote is less than unanimous may be entered. In the case of board or board committee meetings, if a member requests that his or her favorable or opposing vote be specifically noted, the notation should be included in the minutes. Resolutions should be recorded in the minutes in the exact form in which they are adopted.

If a director has a personal interest in a matter brought before the board or a committee, obviously he or she should make appropriate disclosures to the board or committee, and the minutes should refer to or describe that disclosure both for the protection of the director and, in some cases, the validity of the action taken. In these situations, the director probably should abstain from voting on the matter, but ordinarily can continue to be present at the meeting and be counted as part of the quorum.

Waivers of notice, written consents, or approvals of the minutes, signed by absent directors or shareholders in order to validate proceedings at meetings from which they were absent, must either be made a part of the minutes of the meeting or filed with the corporate records. In the case of shareholders’ meetings, formal proof by affidavit (or declaration under penalty of perjury) of the giving of notice should be executed and, with a copy of the notice attached, made a part of the records or attached as an exhibit to the minutes which refer to it.

It is of utmost importance that minutes not be treated as a purely routine record. The minutes can be the subject of inspection not only by directors and shareholders, but also by various outsiders such as the independent auditors, taxing authorities, adverse parties in litigation, and others. Accordingly, minutes should be among the most carefully prepared and reviewed records of a corporation.

THE FOREGOING IS ONLY A GENERAL SUMMARY OF CALIFORNIA CORPORATIONS LAW OR A PORTION THEREOF, AND DOES NOT PURPORT TO BE AN ACCURATE OR COMPLETE STATEMENT OF THE LAW APPLICABLE TO CORPORATIONS IN CALIFORNIA. IT DOES NOT CONSTITUTE A LEGAL OPINION. INDIVIDUAL SITUATIONS MAY VARY. FOR AN ACCURATE LEGAL OPINION, ALWAYS CONSULT AN ATTORNEY.