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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3655
Experience:  Solicitors 2 years plus PQE
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I am a leaseholder on a small private housing development,

Resolved Question:

I am a leaseholder on a small private housing development, and as such I am a member of the Company that has been formed (40 properties). The Company has a Board of Directors and an outside Management Company. The Directors have Board meetings and Minutes are now being taken at these meetings, but haven't been in the past, however there are a few questions regarding the Minutes I would like to ask

1 When taking Minutes should they include the persons name who is making a proposal or motion, and the persons name who seconds the motion

2 Should the minutes be available for all members to see

3 Is it correct that minutes shown or given to members should not be redacted or altered in any way

4 Should they be available at a designated place for all members to view.

5 How serious is it if Minutes are not taken at Board Meetings

Thank you
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.

Alex J. :

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you.

Alex J. :

I am a company law expert. I will answer your questions in turn:

Alex J. :

1. There is no prescribed form under the Companies Act for taking minutes. Normally best practice is to list (i) Company Details; (ii) Date and Location of the meeting; (iii) Name of the Chairman and details of the quorum and any notice given (iv) Reason for calling the meeting (v) Any formalities e.g conflict disclosure (vi) Proposed resolutions; (vii) Voting on those resolutions (viii) Formalities and filing requirements (ix) any other business. This is the minimum detail I would include, if you wanted a transcript of the meeting then their is nothing to stop this but the only relevant outcome of the meeting will be the proposed resolutions and how they are voted on. It is entirely different if the nature of the meeting is not for company administration but for the management of the property, then I would say it is probably very sensible to minute who said what.

Alex J. :

2. Board Minutes - should not be available to all members. Shareholder Meeting Minutes should ideally be available. In fact ideally every resident should be a director, however if their are too many properties to make this practical, then as little as possible should be transacted by board meetings.

Alex J. :

3. If it is board minutes then the directors are entitled to redact them how they like, however the shareholders with enough votes can quite easily either vote out the directors or order disclosure of the company books, if the directors are deliberately concealing information.

Alex J. :

4. All minutes should be contained in the company books. The company books should be made available for inspection at the registered office of the company.

Alex J. :

5. Not very serious unless their allegations of breach of director or other statutory duties (See S.172 of the Companies Act 2006), or the company goes insolvent.

Alex J. :

If their are allegations of impropriety then not having board minutes is going damning evidence, because sometimes a lack of evidence or failure to keep good records is a sign that a director has not discharged their duties well.

Alex J. :

I apologise for any typos this is all done in real time.

Alex J. :

I look forward to hearing from you.

Kind regards

Alex J. :


AJ

Customer:

Thanks you AJ, so to confirm, Directors don't have to keep minutes when they have their meetings discussing the problems of the development and the general running.

Customer:

My problem is I live in a cul de sac approx 80 - 100meters long which has 2 small turning areas in it. last year at a meeting of the Directors, they must have decided to put up no parking signs in the close, they did this without any consultation of the other residents who live there. (there have been some problems with parking but not serious) bearing in mind the size of the close which only has 9 houses 3 x signs were erected, each actual sign being approx 4' x 10" set on posts. The majority of the residents did not want these signs erected.

Alex J. :

Hi, Thank you. There is no specific obligation to keep minutes. However if they are going to ignore the process and wishes of the residents, have you considered voting them out? Kind regards AJ

Customer:

I have asked to see the Minutes in relation to the meeting on these signs as to what process was gone through, I have asked Directors, there was only four at the time and they said they didn't actually keep minutes but one said they had some notes, but they would have to blank out any names another said there were no minutes and the Secretary who works for the Managing Agency said they had no obligation to keep Minutes which I can't believe. I can't tell you the distress this has caused to people who are trying to sell their homes, people come into the close, see the signs which can't be avoided and obviously think there are problems, and this and their erection have been detrimental to people trying to sell their houses, which could be another legal issue, surely residents should have been consulted on this issue before the Directors did this, At the last AGM February 2014 it was voted with a resolution to take two of the signs down and the third after after 3 months if there were no further complaints, there wasn't, and the third sign still hasn't come down . Do you think that by erecting these signs at a cost to members without consultation is right and the fact there is no official written record regarding this, surely when they are spending Members money Minutes should be taken so that there is a paper trail and members can clearly see what happened and where their money is going. I hope you can reply to this, Many thanks Ian

Customer:

Sorry AJ, I didn't realise you had replied I hope the last note I did makes it clearer, Ian

Alex J. :

Hi, Thank you. This is a different issue, this clearly relates to how they are spending the service charge (if there is one). The director can spend the company's money in accordance with the company constitution and in the best interests of the company. If the members do not believe they are acting in the best interests of the company then they should seek to vote them out.

Alex J. :

There is no strict obligation to keep any form of minutes in any prescribed form, but if the directors are exceeding their powers, it is going to look very bad on them if they do not have evidence that this expenditure was properly approved. Kind regards AJ

Customer:

The problem is an Ext AGM would have to be called to vote them out and its trying to get the attendance of other members there and the vast majority who don't live in the close don't know whats going on and are fed up with the parkibg issue which has been going on since before I moved in

Customer:

In 2010 at an AGM they tried to alter the voting rights of the leaseholders and Members as stated in the Articles of Resolution, with a resolution stating one vote per household, the AofR state that every leaseholder has a vote. Firstly there wasn't 75% of members there yet they still went ahead with it, but The Management Company didn't inform Companys House, so wheras the members believed their voting rights had changed in fact they hadn'[t, the whoile thing is run badly and I believe the Directors are getting bad advice from the management Company.

Customer:

Not the answer I wanted but thank you very much

Alex J. :

Hi, Thank you. In order to call a general meeting you only need 10% of the voting members to demand it and you only need 51% of the voting members to remove a director.

Alex J. :

Can you tell me a bit more about these signs? (i) What did they cost (ii) Why are they not in the best interests of the company?

Alex J. :

I have to go offline briefly but will be back after 2pm. Please do not be concerned if you do not hear from me right away. Kind regards AJ

Customer:

They must have cost £700 to put up and erect, in some cases it could take 2 men to carry one, thats how big they are , my understanding is that the Directors should work for the benefit of its members, six out of the nine houses in the close didn't want the signs, at 2014 AGM the resolution stated that people could park whilst being sensible about it, ie not causing an obstruction or parking outside other peoples houses, which is what has always happened but certain people think that for a visitor to park on the road outide where they are visiting, when the drive is full shouldn't be allowed, and even though its not affecting them they make a complaint and so it goes on, since two of the signs have come down there was an unofficial complaint, the person had parked his car at the bottom of his drive against a wall but in a turning area, no obstruction was being caused and the turning area would only be used by himself and the neighbour who could still reverse out of their drive , yet the neighbour could very easily gain access in and out. So the removal of the third sign which the majority don't want is now going to be discussed at the next board meeting.

Customer:

I believe that the signs are not in the interest of the Company and its members a - because the majority didn't want them and b - Their erection has put buyers off from purchasing properties for sale and c - they are unsightly and cannot be enforced in any case.

Customer:

By the way Alex I hope I am not paying any more than I have already paid for the generosity you have shown in answering my points on this topic

Alex J. :

Hi, Thank you. The fact that the directors put this to a member vote and still went ahead with this proposed action despite not having authority clearly shows they are acting ultra vires. Technically you could have grounds to bring a derivative claim against them personally under S.260 of the Companies Act 2006 for breaching their authority. What I think you need to do is raise this specific point as an issue at the next meeting, because without doing that you wont so the seed for their removal. If you are not a director there is nothing to prevent you from informally approaching the other members and gaining support to vote them out at the next meeting. Has an agenda been circulated in anticipation of the next AGM?

Alex J. :

If you have a made a deposit I do not believe you will pay any more and I am happy to assist you until you are satisfied.

Alex J. :

The experts are users of the site in the same way as you, we login in but do not control the administration. If you have any issues with using the site I can refer the matter to customer service. Kind regards AJ

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