BEST INVESTMENT OF TIME FOR BUSINESS OWNERS
I want you to give some advice to my son, who is starting up his own business. What’s the best steps he can take to make sure the business is successful.
Well although I have never met your son and don’t know his background – but I am happy to tell you three things that any businessman should implement into his business which will ensure its best chances of success.
I will take them one at a time, you will need to implement this one first, before we mone on any further …..
Firstly, although there is no explicit requirement under the Companies Act for Directors to hold meetings. It is difficult to demonstrate that decisions were made in a timely manner, unless they are recorded in a properly formatted Board Minute.
A Board Minute is the Directors best defence against accusations that they did not exercise their required level of care and responsibility.
Even if your son is a sole Director, he should start as he means to go on, set aside time to meet (with himself) or a third party and get the Minutes properly recorded and stored.
Quite frankly, that sounds ridiculous!
I thought you might say that, all I can tell you that I have found this very helpful in assisting Directors to manage their companies and in making decisions. We all normally based upon emotion, a Director meeting recording your decisions provides an opportunity for reflection.
I can’t think of one small business that does this.
Quite, that why so many end up in trouble.
So typically what needs to go into these board minutes?
Anything that binds a company, so any contract with a supplier, lease agreements, bank mandate authority information ….
We already hold all that information in files …
Where are these files ?
Well our book keeper has some, as she has responsibility for making payments of the rent and to making any regular direct transfers of money, and the other files are around here somewhere …
So, what you are telling me is that her responsibilities and authority to make payments are fully documented in the Bank Mandate Minute.
I am not sure that is true…
Also, that your son is fully aware of the important dates and financial implications of the contents of the files that you cannot produce at this moment.
More or less …
So, what is the exact date the lease ends on the premises ?
He thinks that it is 5 May 2025 …
Look promise me you will sort this out over the next few days, as you need to prove to me you’re your son is in control of the business.
Also, there are further important board minutes that we need to discuss.