Compliances

What is Quorum For Board Meeting in Regards to Companies Act, 2013?

calendar11 Apr, 2020
timeReading Time: 3 Minutes
Quorum

The quorum for meeting refers to the minimum number of directors that ought to be required at the Board meeting. The meetings cannot be conducted in the case of minimum quorum. However, a Board meeting may comprise a higher quorum than the essential requirement to the registered companies.

A minimum quorum[1] should be equivalent to one-third of the total strength of directors. A board meeting cannot be held in the absence of a quorum, and any decision taken without the quorum would be void.

The quorum for meeting constitutes the directors who play a vital role in the Board meeting. The directors can connect with the meeting through video conferencing or by other audiovisual means.

Quorum – While commencing the meeting

If the requisite quorum fails to register their presence at the start of a Board meeting, the meeting stands adjourned as per the Articles of Association of the company.

If the article is silent, then the meeting automatically subjected to cancellation to the same day in the upcoming week. If that day encounters the national holiday, then the meeting will be postponed to the next free date.

The meeting, as per the article of association, is stands adjourned on the following holidays.

  • Republic Day
  • Gandhi Jayanthi
  • Independence day
  • Or public or national holiday by the Central Government.

Quorum for meeting – Disinterested Directors

The quorum of disinterested directors is exceptionally crucial for each business transacted at the meeting unless the article provides for a higher quorum. Discussions would not be convened without the support of the quorum of disinterested directors.

Quorum for board meeting – Exception

No Board meeting could be held in the absence of the quorum. However, due to uncontrollable circumstances, a quorum may be restricted to a fewer number of directors. The reason for reduction could be registration, death, removal, disqualification of a director, or the automatic vacancy. In such an event, a single director can handle a Board Meeting either by increasing the number of directors or requesting a general meeting for a company.

A single director is not entitled to conduct a meeting for any purpose. This provision is only applicable in the case if the number of directors is limited to one. If the quorum comprises a minimum of 2 directors, then the meeting could be conducted without any hassle. 

Meetings of the Board of Directors

The directors of the corporation are considered as the representatives of the shareholders. They manage the workflow of the organization on behalf of the shareholders.

Periodicity of the BoD Meeting

The meeting of the Board of Directors ought to be conducted once every 3 months. This implies that a minimum of the four meetings should be held in a year.

Purposes of BoD Meeting

The aim is that Board meetings ought to be held frequently for the welfare of the organization.

In context to the small companies that don’t have sufficient privilege to conduct the meetings, the central government acts can as a guiding light for them.

Notice to BoD Meeting

Notice of the meetings must be rendered in writing to every director in India. The notice should be given to a director regardless of their intention or plan in context to the board of meeting.

Unless the articles specify, the proper notice should be addressed to the concerned members before the meeting. The notice should consolidate the basic info like time, place, date, and venue.

Agenda for BoD Meeting

Agenda act as a detailed blueprint of the meeting. It radically exhibits the things that require to be covered up and the order in which they needed to be executed.

In the context of the board meetings, it displays the items related to the business that would be transacted. Though sending the agenda isn’t mandatory, it is usually sent to the concerned directors who will be responsible for preparing the items to be discussed.

Conclusion

It’s quite clear from the above information that the board meetings cannot be held with fewer directors. Minimum criteria, as per provisions, should be met to conduct successful board meetings. Hopefully, by now, everything is crystal clear to you, and if it is not, then drop your queries in the comment section. We will respond to them in no time.

Read our article:Board Meeting – Meaning, Quorum, Notice and Requirements

Pankaj Tyagi

Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.

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