A company is an artificial judicial person created by law having its own distinct entity form and capable of entering into contracts. Since the company is an artificial person, it acts through human agents who manage the affairs of the Company. The Board of Directors of a Company are the persons responsible for managing the affairs of the company and so it is important that they meet at regular intervals and take major decisions. In this article, we look at the basics of a company board meeting in FAQ format.
How frequently must Board Meetings be conducted?
All companies are required to hold a board meeting atleast once every three months and there must be four board meetings each year.
How to provide notice for Board Meeting?
Notice of Board Meeting of a Company must be provided in writing to every Director of the Company. There are no time limit or mode for sending of the Board Meeting notice prescribed in the Companies Act, 2013. However, if a board meeting is held without giving notice to all the Directors, then the meeting will be invalid and the resolutions passed in the meeting will be treated as inoperative. However, if all of the Directors of a Company attend a Board Meeting and do not object to the absence of a board meeting notice, then then Board Meeting will be considered valid.
It is a good practice to give notice of board meeting to all the Directors of the Company along with an agenda for the meeting.
When and where to conduct a Company Board Meeting?
There are no restriction in the Companies Act, 2013 with respect to the time and place for conducting a Board Meeting. However, the Articles of Association of a Company can restrict the time and place of conducting a board meeting. Hence, it is good to check with the Articles of Association of the Company.
The Board Meeting can be held at any place in India or even outside India. As per the Act, it is important to have place statutory registers and records during the Board Meeting.
What is Quorum for Board Meeting?
Quorum is the minimum number of Directors required at the board meeting to validly transact any business. The quorum for a board meeting is usually one third of the total strength of the Directors or two Directors, whichever is higher.
What if Quorum is not present for a Board Meeting?
If the quorum required for a Board Meeting is not present, the meeting cannot be held and will automatically be adjourned. A company can define through its Articles of Association the procedure for adjournment for want of quorum.
What is passing of a resolution by circulation?
In addition to passing resolutions at the Board Meeting, resolutions can also be passed by circulation. The Board of Directors may pass any resolution by sending a draft of the resolution together with the necessary information to all the Directors.
The resolution so circulated amongst the Directors will be deemed to have been duly passed if the same is approved by all the the Directors, not less than the quorum. A resolution passed by circulation must be paseed in the next meeting of the Board of Directors.
The passing of resolution by circulation still doesn’t dispense the requirement for holding atleast one Board Meeting every three months.
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