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 after availing company registration 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.
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. Certain transactions cannot be discussed through Video Conferencing- 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. 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. 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. 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. 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. 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. 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 Manner of Participation in the meeting by the Directors
What cannot be discussed through Video conferencing in the Board Meeting?
Notice of Board Meeting
What is the Ratification thereof by a majority of Directors?
A Quorum of the
Board Meeting-Section 174 of the Companies Act, 2013
Chairman of Board Meeting
Minutes of the Board Meeting
Takeaway
