Board Meeting – Meaning, Quorum, Notice, and Requirements

The Company’s Director may call a Board meeting at any moment. On the Director’s request, any individual authorized by the Board to convene a Board Meeting shall do so. Every firm must hold a board meeting within 30 days of its incorporation. On the other hand, the Board of directors may attend a meeting in person or by video conference.

In this post, we will go over the Board Meetings as defined by the Companies Act, 2013, and the meaning, critical requirements, and quorum for the Board Meeting.

What Exactly is a Board Meeting?

It is a meeting of the firm’s Board of Directors (executives or directors) to discuss specific concerns or transactions concerning the Company. This meeting will take place at a particular location and time.

The Most Important Criteria for Conducting the Board Meetings

The primary criteria are as follows:

• All directors must be given adequate notice.
• A sufficient number of people
• Appropriate agenda and documentation
• The Chairperson is present.
• Proper Minute Book Maintenance

Also, read our Article on: Concept of Minutes of Meeting: Companies Act, 2013

Board of Directors Meeting – Section 173 of the Companies Act of 2013

The Board Meeting is addressed in Section 173 of the Companies Act of 2013. According to the Companies Act of 2013, every firm must observe the norms and regulations outlined in this section.

Every company must hold a board meeting within 30 days of incorporation after obtaining incorporation of company and must have a minimum of four sessions of its Board meetings each year.

However, the meeting must be arranged so that at most 120 days pass between two consecutive Board sessions.

Non-applicability – The Central Government may, by notification, order that the requirements of the preceding sub-section do not apply to any class or description of companies. It can also be used subject to the exceptions, adjustments, or limitations mentioned in the notification.

Also, read our Article on: Powers of Board & Restriction on Powers of Board – Companies Act 

Participation of the Directors at the Meeting

Depending on the circumstances, the Company’s directors can attend an in-person meeting or via video conferencing. Such arrangements must be adequately documented, including the date and time.

Note: The Central Government may specify by notification what issues cannot be dealt with in a meeting via video conferencing or other audio-visual means.

Also, read our Article on: Matters to be Included in Board’s Report under Companies Act, 2013

What cannot be said in the board meetings via video conferencing?

Certain transactions are not permitted to be addressed via video conferencing-

• Concerns about the annual financial statements.
• Concerns about the Board’s reports.
• Concerns about the prospectus’s approval.
• Affiliation, merger, demerger, acquisition, and takeover issues

Also, read our Article on: Composition of the Board of Directors of a Listed company in India

Board Meeting Notice

Every Director must receive written notice of the next board meeting at least seven days in advance at the registered office of the Director. The information must be delivered either by mail or electronically.

Notifications may be sent to either the address listed in the Director’s DIN registration or the address the Director specifies in the event of an address change or lack of a registered address.

Notice at a shorter Period: A meeting may be convened with less notice to conduct urgent business, provided that at least one independent Director, if any, is present.

The decisions made by the directors in the meeting must be distributed to all the directors if an independent director is absent.

What does a Majority of Directors mean by Ratification thereof mean?

The decision made in the meeting must be distributed to the Company’s directors if the directors are given notice in a shorter amount of time and there is no independent director to make the choice. The decision will be considered final once most directors have ratified it once it has been distributed to all.

If an officer of the Company responsible for giving notice violates this section 173, they may be subject to a fine of up to 25,000 rupees.

One-person businesses, small businesses, and defunct businesses will be judged to have satisfied the requirements of this section if:

• Each half of a calendar year has seen at least one Board Meeting, and
• There is at least a 90-day interval between the two meetings.

Meeting of the Board Quorum under Section 174 of the 2013 Companies Act

The minimal number of directors required for Board Meetings is called the quorum. A minimum of one-third of the total number of directors is considered the minimum quorum for board meetings. Anyhow, a minimum of two directors are required (in the event of an interested director) as the quorum for the directors’ meeting. That is part of the board meeting quorum rules.

The One Person Companies are not applied by Section 174.

Chairman of the Board

The Board Meetings will be presided over by the Company’s Chairman. The company directors may choose one of them to serve as Chairman if the Chairman is absent.

The Chairman’s responsibility is to oversee the board meeting’s business and to ensure that the meeting is duly called under the 2013 Companies Act with the help of the company secretary.

Also, read our Article on: Procedure for Cancellation of Resolution passed in Board Meetings

Board Meeting Minutes

Every Company must keep a Minute Book with a record of each meeting. The business must prepare minutes by the 2013 Companies Act. For that purpose, an appropriate entry must be made in the minute book kept by the company secretary. The Minute book’s pages must have sequential numbers.

The Company’s Company Secretary shall maintain custody of the Minute Book. Additionally, only the Company’s Director can view the minute book; however, members are not permitted to do so.

Within a certain amount of time, the Chairperson must sign each page of the minute book that the company secretary has created.

Winding Up Note

Each Company must adhere to the requirements of the Companies Act 2013 before convening  board meetings, which needs adequate planning and execution. The corporation must conform to all regulations and paperwork, including satisfactory quorum requirements and agendas. The company secretary is in charge of conducting meetings under the needs of the Secretarial Standard and the Companies Act.