People responsible with the administration of an Australian company would have come across the term “Good corporate governance” (GCG). GCG is a catchphrase bantered around by lawyers and judges just as much as nutritionists stress the importance of “Healthy living”. While it sounds simple, what does it mean on a day to day basis? While exercise and good eating are important daily components for healthy living, a company’s corporate registry is an important component of GCG. A common factor that may not be readily recognised is that both require good practices and routines.
An important element of GCG is a good document management system and at the forefront is the often forgotten corporate registry. From new directors or shareholders to decisions affecting the company, these should be recorded in meeting minutes and placed into your registry. In its simplest terms, a corporate registry is akin to a diary recording noteworthy events for future reference. From a lawyer’s perspective, how many reams of paper or the number of pens the company ordered in the last stationary order is of little interest. However, leasing of new equipment or a vehicle is a matter that should be determined at a Directors Meeting and recorded in minutes which is then placed in the corporate registry.
You may be thinking this may sound interesting, but is it really worth the time involved when there are so many other things requiring your attention? One very good reason is that proper meeting minutes can evidence compliance of Director duties imposed at law. Needless to say, the more information contained in your meeting minutes such a tabled documents and points discussed prior to voting on a resolution, provides better understanding of the actions of the Directors.
A common mistake by Sole Directors is thinking there is no requirement to record their actions as a Director. While the term “meeting” is not appropriate for a sole director company, there are other mechanisms in place under the Corporations Act 2001 (Cth) to record sole director resolutions. Duties on directors apply equally to a sole director as it does to a board of directors as do compliance with the constitution of a company and the Corporations Act.
The most common reason for failing to keep adequate corporate records is the time it takes when a person is unsure of how to prepare proper documentation. All to often, it gets placed in the ‘too hard basket’ for another time which never comes around. With Government authorities and Courts looking more critically at the maintenance of corporate records, the maintenance of such records can make a difference to future problems both in evidencing internal decisions of the Company and thereby evidencing attention to GCG.
Vantage Law can assist you with:
- drafting of notices and minutes for meetings of Directors and Members;
- maintenance of company registry;
- preparation and lodgement of all ASIC forms;
- compliance with company constitution and Corporations Act requirements.
Vantage Law provides the above commentary for the purpose of general information only and should not be relied upon as legal advice. You should contact us in relation to any legal advice you may need which is particular to your situation and circumstances.