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Priyanka Bajpayee
| Updated: 20 Mar, 2020 | Category: Compliances

Board Meeting – Meaning, Quorum, Notice and Requirements

Board Meeting

The Director of the company may at any time call a Board meeting. On the requisition of the Director, any person authorized by the Board in this behalf shall convene a Board Meeting. Every company shall convene a board meeting within 30 days from the date of the incorporation. However, the participation of the board of directors in a meeting may either be in person or through video conferencing.

In this article, we will discuss the Board Meeting as per the Companies Act, 2013[1] and the key criteria to conduct the Board Meeting.

What is the Board Meeting?

It is the meeting of the Board of Directors of the company (Executives or directors) to discuss certain issues or transactions related to the company. This meeting is held at a definite place and time.

Key Criteria for conducting the Board Meeting

The key criteria is as follows:

  • Proper notice must be circulated to all the directors.
  • Adequate Quorum
  • Proper Agenda and Proper documentation
  • Presence of Chairperson.
  • Proper maintenance of Minute Book

Board Meeting as per section 173 of the Companies Act 2013

Section 173 of the Companies Act, 2013 deals with the Board Meeting. As per this section, every company is required to follow the below-mentioned rules and regulations laid down in this section as per the Companies Act 2013-

Every company shall convene a board meeting within 30 days from the date of the incorporation and thereafter hold a minimum number of 4 meetings of its Board of Directors every year.

However, the meeting must be held in such a manner that not more than 120 days shall intervene between 2 consecutive meetings of the Board.

Non-Applicability – By notification, the Central Government may direct that the provisions of the above-mentioned sub-section shall not be applicable concerning any class or description of companies. Further, it can be applied subject to such exceptions, modifications or conditions as specified in the notification.

Manner of Participation in the meeting by the Directors

The directors of the company can participate in a meeting either in person or through video conferencing as may be prescribed. There must be a proper record of such meetings along with date and time.

Note: By notification, the Central Government may specify such matters which cannot be dealt with in a meeting through video conferencing or other audio-visual means.

What cannot be discussed through Video conferencing in the Board Meeting?

Certain transactions cannot be discussed through Video Conferencing-

  • Matters related to the annual financial statements.
  • Matters related to the board reports.
  • Matters related to the approval of the prospectus.
  • Matters relating to amalgamation, merger, demerger, acquisition, and takeover

Notice of Board Meeting

A Board Meeting shall be convened by giving not less than 7 days’ notice to every director in writing at his registered address mentioned in the company. The notice shall be sent either by post or by electronic means.

Note: In absence of registered address or in case of a change in registered address, the notice can either be sent on the address mentioned in DIN registration of the director or the on the address specified by the director.

Notice at a shorter period – To transact urgent matters, a meeting may be called at shorter notice, subject to the condition that at least 1 independent director, if any, shall be present at the meeting. In Case of the absence of Independent Director, the decisions taken by the directors in the meeting shall be circulated to all the directors.

What is the ratification thereof by a majority of Directors?

If the notice is issued to the directors at a shorter period and there is no Independent director to take the decision, the decision taken in the meeting shall be circulated to the directors of the company. Once the decision is circulated to all the directors, the decision shall be considered final only on Ratification thereof By a Majority of the Directors.

Under this section 173, If the officer of the company whose duty is to give notice, fails to comply with the duty shall be liable to a penalty of twenty-five thousand rupees.

Note: In case of A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if –
  • At least 1 Board Meeting has been conducted in each half of a calendar year and
  • The time gap between the two meetings is not less than 90 days.

A Quorum of the Board Meeting-Section 174 of the Companies Act, 2013

For Board Meetings, the quorum refers to the minimum number of directors required for Board Meetings. For Board Meetings, the minimum number of members required is 1/3rd of the total number of directors. In any case, (In case of Interested Director) a minimum number of 2 directors are necessary.

Note: Section 174 does not apply to One Person Company.

Chairman of Board Meeting

The Chairman of the company shall be the chairperson of the Board Meeting. In case of the absence of Chairman, the director of the company among themselves may elect one of them to be the Chairman.

It is the duty of the chairman with the assistance of the Company Secretary to look after the affairs of the board meeting and to keep a check that the meeting is duly convened by the Companies Act, 2013.

Minutes of the Board Meeting

Every Company shall maintain a record of the meeting in a Minute Book. Minutes shall be prepared by the company following the provision of the Companies Act, 2013. There must be a proper record in the minute book maintained by the Company Secretary for that purpose. The pages of the Minute book shall be consecutively numbered.

The Minute book shall be kept in the custody of the Company Secretary of the Company. Further, the director of the company can inspect the minute book, but the members of the company are not allowed to inspect the minute book.

The chairman shall sign each page of the minute book prepared by the Company Secretary within a stipulated time.

Takeaway

Board meeting requires proper planning and execution, and every company before conducting the board meeting shall comply with the provisions of the Companies Act 2013. All the documents and compliance like proper agenda, a proper quorum is required to be followed by the company. It is the responsibility of the company secretary to conduct a meeting in such a manner as specified in the Companies Act and as per the Secretarial Standard.

For more details about the compliance of the Board meeting and related services, feel free to Contact Corpbiz, our team of Professionals will assist you in proper compliances and execution in the related services.

Read our article:Companies Act 2013 Provides a Procedure for Appointment and Resignation of the Directors

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Priyanka Bajpayee

Priyanka Bajpayee has done Masters in International Business Law and well versed in content writing covering the area of legal and finance. Also, she has practical experience of almost 1.5 years in Legal compliance and secretarial work.

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