Management Notes

Reference Notes for Management

The minute books are the ____book of the company.

The minute books are the ____book of the company.


A. subsidiary.
B. statutory.
C. obligatory.
D. secondary.

The Correct Answer Is:

  • B. statutory.

The correct answer is B. statutory.

Minute books are an essential component of a company’s record-keeping, documenting the proceedings and decisions made during meetings of the board of directors and shareholders. These books are not just any ordinary records; they have a specific legal and regulatory significance. Therefore, the term that best describes them is “statutory.”

Here’s a detailed explanation of why the other options are not correct:

A. Subsidiary:

The term “subsidiary” refers to a company that is controlled or owned by another company, known as the parent company. Subsidiaries have their own sets of records, including minute books, but describing minute books as “subsidiary” is inaccurate.

Minute books are a primary record of corporate governance and are maintained by the company itself, regardless of its subsidiary or parent status. This term does not accurately convey their role in the company’s governance and compliance.

C. Obligatory:

The term “obligatory” means required by obligation or duty. While maintaining minute books is indeed a legal requirement for companies in many jurisdictions, describing them as “obligatory” doesn’t provide a clear indication of their nature.

Minute books are more than just a mandatory chore; they serve as the official record of crucial decisions and actions taken by a company’s leadership. Describing them solely as “obligatory” neglects their legal and informational significance.

D. Secondary:

The term “secondary” implies that something is of lesser importance or significance compared to something else. Minute books are not secondary records within a company; they are primary and foundational documents. They provide a historical record of important corporate decisions, financial transactions, and governance matters.

Designating them as “secondary” would undermine their importance and legal relevance. Additionally, minute books are often used as primary sources of information in legal and regulatory matters, further emphasizing their primary role.

In summary,

The term “statutory” is the most appropriate choice to describe minute books accurately. Minute books are mandated by law in many jurisdictions, and they hold a unique legal and regulatory significance within a company’s records.

Describing them as “statutory” underscores their importance in maintaining compliance and transparency, as well as their role as an official record of corporate governance. The other options – subsidiary, obligatory, and secondary – do not accurately capture the essential nature and purpose of minute books within a company’s operations and legal obligations.

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