MEETINGS OF BOARD
- Every company shall hold its first board meeting within 30 days from the date of incorporation. After the first board meeting, every company shall hold minimum four board meetings in a calendar year.
- In holding board meetings during the year, there shall not be more than 120 days gap between two consecutive board meetings. However in the Covid duration 120 days shall be replaced with 180 days till any further MCA notification.
- In case of one person company, dormant company, small company, section 8 company and private company (if such private company is a start-up) this section is deemed to have been complied if at least one board meeting has been held in each half of a calendar year and the
- Every officer (Defined under Section2 (59) of Companies Act,2013) whose duty is to give notice under this section, fails to do so shall be liable to a penalty of rupees twenty five thousand.
MEETINGS THROUGH VIDEO CONFERENCING OR AUDIO VISUAL MEANS
- The participation of directors in a meeting of Board may be either in a person or through video conferencing or audio visual means as may be prescribed which are capable of recording and recognising the participants and storing the proceedings of meetings along with date and time.
- The notice of meeting shall inform the participants the option available to them and shall provide the necessary information to them for participating through video conferencing or audio visual means.
- At the commencement of the meeting, a roll call shall be taken by the Chairperson/Company Secretary where every director participating through video conferencing or audio visual means shall state for the record namely: – the name, location from where he is participating, that he has received the agenda & all the relevant material for the meeting and that no one other except the concerned director is attending or have access to the proceedings of the meeting.
- From the commencement of the meeting and until the conclusion of such meeting, no person other than the Chairperson, Directors, Company Secretary and any other person whose presence is required by the Board shall be allowed access to the place where any director is attending the meeting either physically or through video conferencing without the permission of the Board.
NOTICE FOR BOARD MEETING
- Every board meeting shall be held by giving at least seven days notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.
- In order to transact urgent business, board meeting can be called by giving shorter notice subject to the condition that at least one independent director should be present at the meeting.
- In the absence of independent directors from such meeting of the Board, decisions taken at the meeting shall be circulated to all the directors and shall be final only on ratification thereof by atleast one independent director, if any.
QUORUM FOR MEETINGS OF BOARD
The quorum for meeting of Board of Directors of a company shall be one third of the total strength or two directors, whichever is higher and the participation through video conferencing or audio visual means shall also be counted for the purpose of quorum.
CONCLUSION OF ABOVE EXAMPLE
As per the provision, the Quorum shall be 1/3rd of total strength or 2 whichever is higher and in above example Board strength as shown is 9 whose 1/3rd will become 3 ,So 3 or 2 (whichever is higher) that is 3. Therefore Min. 3 Directors are required to constitute the Quorum of the meeting and in the above example there are 6 directors present in the meeting (2 by VC and 4 Physically) , Directors which are present through VC shall also be counted for the quorum as physical quorum is also present in the meeting , Hence the Quorum is present in the meeting.
In case of section 8 company, quorum shall be eight members or 25 percent of total strength whichever is less. Provided that the quorum in case of section 8 company shall not be less than two members.
If the number of directors which are required to maintain quorum reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for increasing the number of directors to that fixed for quorum or for summoning a general meeting because except those directors which are required to be appointed by the board shall be appointed by the members of the company by passing ordinary resolution.
Where at any time the number of interested directors exceeds or is equal to two-third of total strength, the number of directors who are not interested and present at the meeting, being not less than 2, shall be the quorum during such time.
Steps How to check the quorum of the Board meeting
- Firstly check the criteria of 1/3rd or 2 whichever is higher.
- After checking the above criteria see whether quorum is present or not, then check that whether the number of interested directors exceeds or is equal to two-third of total strength.
- At last check whether Disinterested are Min. 2 or not.
- If the Disinterested directors are 2 or more only then the quorum will be valid.
Note:- In case of private limited company, interested director may also be counted towards quorum in such meeting after disclosure of his interest pursuant to section 184.
Where a meeting of the board could not be held due to want of quorum, then articles of a company unless otherwise provide, the meeting shall stand adjourned to the same day at the same time and place in next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday.
For the purpose of this section, any fraction shall be rounded off as one and total strength shall not include directors whose places are vacant.
Where the quorum is present through physical presence of directors, any director may participate through video conferencing or other audio visual means.