File : Drawing up minutes for a General Meeting

Part 3

What happens to minutes of general meeting?

Minutes of a general meeting

The main purpose of minutes is to prove the decisions taken, particularly in a general meeting. For this reason, the contents of these documents should never be altered and their hard copies stored carefully.

How to archive the minutes of general meetings

Hard copies of minutes

Regardless of the legal form of the companies, the minutes must be kept in accordance with one of the following procedures:

- Either by writing or typing them directly in a special register kept at the registered office:    
This register contains individual sheets, that have been previously (i.e. before any use) numbered (without interruption), listed and initialled by the competent authorities (a judge of the commercial court, or by a judge of the court of first instance or by the mayor a deputy mayor of the town where the company is headquartered). After writing or typing the minutes on these sheets, these sheets must be initialled and signed by the persons holding this right in the company in question.

Good to know: This type of register of the general meetings is presented in the form of a file found in specialised stationers, known as legal stationers. It is highly recommended to adopt this method:

- Either by writing or by typing directly onto loose sheets, independent of any special register sheets.
Beforehand (i.e. before any use), these sheets must have been numbered without interruption, listed and initialled in the same conditions as the register.
After writing or typing the minutes on these sheets, these sheets must be initialled and signed by the persons holding this right in the company in question. There is nothing to prevent you binding these sheets together or even inserting them in a box file or even pasting them into a register (without it being necessary that this file or register has been listed or initialled).

- Or by reproducing them on loose sheets of the special register or on loose sheets separate from this register.
The minutes are usually entered into a computer beforehand, printed and reproduced by photocopying, not on completely blank sheets of paper but on the loose sheets of the special register or on separate loose sheets from the register, provided that, in each process, all these sheets have been previously (i.e. before any use) numbered without interruption, listed and initialled in the conditions mentioned above. The text that reproduced on these sheets does not present any risk of error. Finally, the loose sheets that reproduce the minutes must be initialled and signed by the persons holding this right in the company in question.

Good to know: Failure to keep the minutes, using any of these processes, is not specifically sanctioned, except for sociétés anonymes (limited companies).  Any interested party may, in effect, ask the presiding judge of the Commercial Court ruling in summary hearings to order the chairman of the general meeting of shareholders under penalty of a fine, to transcribe the minutes of those meetings, at least in a special register kept at the headquarters. However, it is strongly recommended, irrespective of the legal form of the company, to adopt a medium adapted for archiving.

 

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Limits for preparing of minutes

- If a page or its reverse side is only partially filled in, and if a new page or a new sheet is used to add a new deliberation to the minutes, it must first cancel the page or the part of the page not used, so as to exclude any fraud consisting notably of adding any subsequent text, i.e., after another deliberation.

- The following process is not accepted: it involves pasting the minutes into the registers and signing them so that the signatures relate to both the register and the pasted page.

- The initials and signatures must be placed directly on the minutes, regardless of their medium (special register, loose sheets separate from any special register). There can therefore not be any photocopies.

- The different processes mentioned must be excluded when, in some cases, the law or regulations requires minutes to be prepared in the form of authentic instruments. These instruments are those mainly drawn up by a state official, such as a notary public, whose statements are authentic until falsified. Therefore, for minutes prepared by a notary public, this document consists exclusively 'dans la minute' (the reference) of the original document retained in the archives of this state official.

How long should the minutes be archived?

The register of the minutes, among other documents, must be kept at least 6 years. Indeed,
- the time limit for nullity proceedings for general meetings is three years;
- tax authorities' right to investigate, audit and be kept informed can extend to six years.
However, the principle of caution is recommended, you should keep this indefinitely, for example in case it might be required to prove the conditions for adopting a decision.

 

Why and how to record the minutes of a general meeting?

Certain decisions of partners or shareholders, especially when taken in general meetings, must be published.

The conditions for publishing these decisions will vary according to the subject of the decision. In general, irrespective of the legal form of the companies, the formalities are as follows:
- a notice concerning the minutes of general meeting that deliberated on the resolution(s) corresponding to the decision(s) must be inserted in a journal for legal notices;
- The minutes of general meeting in question must, in principle, be filed with the registry office of the Commercial Court to carry out an amendment to the registration at the Trades and Companies Register and a notice in the BODACC (official bulletin of commercial announcements).

This is in principle for the decisions to:
- modify the articles of association (for example: the change of company name, any modification to the share capital etc.);
- modify the composition of some corporate bodies, such as the management team (or manager) whose appointment does not require the articles of association to be modified but result in appointing or ending the functions of this type of manager, by resolutions of the general meeting).

Certain decisions of partners or shareholders, especially when taken in general meetings, must be registered with the tax authorities.

This is particularly the case for capital increase decisions.

The partners and shareholders have of an intangible right to be kept informed including through the minutes of meetings.

In effect, in principle, these people must be able to consult the minutes of the meetings at the registered office, regardless of the legal form of companies. This power may be exercised:
- by the persons themselves or through their legal representatives (this is not possible for the SNC and the SARL);
- permanently, for SAs and SARLs and, twice a year, for non-manager partners of SNCs;
- limited to the last three financial years for the SA and the SARL, and since the creation of the company, if it is a SNC.

The rights of shareholders, partners or their proxies (a possibility excluded in the SNC and the SARL) to exercise their right to be kept informed of the minutes, must be possible by consulting the originals of these documents in the registered office.

The communication of the original of the minutes of general meetings or their extracts may be replaced or supplemented by providing the true certified copy of the original to the partners or shareholders who request it.

This is the case, for example, for the minutes of general meetings that must be filed with the registry office of the commercial court for modifying registrations at the Trades and Companies Register.

However, the tax registration formality requires at least the original copy of the minutes to be sent to the tax authority.

Copies or extracts of such minutes must be validly certified:
- In the SA with a board of directors: by the chairman of the board of directors or the managing director if he is a board director or by the secretary of the general meeting;
- In the SA with an executive board and a supervisory board: by a member of the executive board or by the chairman or deputy-chairman of the supervisory board or by the secretary of the general meeting;
- In the SNC and the SARL: by only single manager;
- In all companies in liquidation, by a single liquidator.

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What are the sanctions for untruthful or invented minutes?

The preparation of the minutes of a general meeting that have been fully or partially falsified renders their authors liable to criminal sanctions.

It is the criminal offence to forge a private document. When this offence is legally established, the individuals who are deemed responsible (essentially the directors of companies, with respect to their obligations to draw up the minutes and sign them as chairmen of general meetings, unless there is proof that this was forged by a third party without their knowledge), are liable to the sanctions of fines and imprisonment, respectively limited to €45,000 and three years in prison.

This offence is characterised, whenever it is proven by any interested person, by any means, that the minutes contain information whose truthfulness (material, such as the physical alteration of the documents, as well as intellectual, such as a lie contained within the substance or the very content of the minutes) has been fully or partially fraudulently altered or distorted. For example, this includes

- The general meeting being held, while it never actually took place;
 
- The votes which, in fact, were never conducted ;

- The presence of some of the partners in an SARL, who were in reality absent;

- The presence of an auditor of a SA and the reading of the auditor's reports when although it was duly invited, was absent.

- The imitation of the signature of a director at the end of the minutes.

Good to know: In addition, the legal nature of the offence of falsification due to a false statement that a general meeting has been held which has, in fact, never taken place, can trigger a host of other penal sanctions, mainly against company directors (except if there is proof that they were falsified by a third party without their knowledge). These company directors can, in effect, be held liable, especially when it concerns the annual general meetings to approve the annual accounts of the previous financial year, when other serious correctional offences are exposed: failure to invite the partners or shareholders to the general meeting and failure to inform these persons of the mandatory information prior to this meeting, such as, for example, the accounting documents (annual accounts, financial reviews, etc. ).

Moreover, proof of falsifying the minutes can give entitlement to a claim for damages against the perpetrators of such acts, in the context of a civil liability law suit brought both before the civil and criminal law courts. In the latter case, it is still necessary to, in the context of the criminal action, "constitute a civil party ", i.e. pursue the civil suit by the victim(s) of prejudices resulting from the falsifications. In addition, this right can only be exercised, for personal prejudice of the partners or shareholders and/or third party, if one or more of these persons, claimants to the legal proceedings against the directors, can demonstrate that the falsification of the minutes has caused them real personal prejudice. Similarly, if the law suit (referred to in this case, as a corporate suit or an action ut singuli) is initiated, particularly by one or more partners or shareholders against directors(s), for prejudice caused to the company, for example, due to falsifying the minutes, these claimants must demonstrate that the company has actually suffered these prejudices.