The Meeting of Board of Directors of a Company is an important aspect of running a private limited or limited company in India. As per the Companies Act, 2013, every company must hold its first meeting of the Board of Directors within 30 days of incorporation and thereafter ensure that a minimum of four Board Meetings are held each year. The Board Meetings must be appropriately scheduled to ensure that there is not a gap of more than 120 days between two consecutive Board Meetings. In addition to the statutory requirement for holding board meetings, a Board Meeting can be called for and conducted for considering certain matters, which must be considered by the Board of the Company. In this article, we look at those matters that require company board approval.
The following matters should be considered at the meeting of the Board of the Directors of the Company:
– To approve financial statements of the Company and the Board’s Report;
– To make calls on shareholders in respect of money unpaid on their shares;
– To diversify the business activities;
– To invest the funds of the Company;
– To borrow monies;
– To authorize buy-back of securities;
– To issue securities, including debentures;
– To grant loans or give guarantee or provide security in respect of loans;
– To approve amalgamation, merger or reconstruction;
– To take over a company or acquire a controlling or substantial stake in another company;
The above matters can also be delegated by the Board of Directors of the Company to a committee of Directors, the Managing Director, or Officer of the Company by passing a resolution.
The following matters can ONLY be considered by a Meeting of the Board of Directors of the Company:
– To make political contributions;
– To appoint or remove key managerial personnel;
– To approve quarterly, half-yearly and annual financial statements or financial results;
– To take note of the disclosure of Director’s interest and shareholding;
– To appoint internal auditors and statutory auditors;
– To buy or sell investments held by the company, constituting 5% or more of the paid up share capital and free reserves of the investee company;
The following matters are generally placed before the Board of Directors of the Company:
– Allotment of shares and debentures;
– Issuance of shares;
– Appointment of Directors;
– Consideration of Annual Accounts of the Company;
– Appointment of Company Secretary;
– Approval of interim dividend and recommendation of final dividend;
Convening Company Board Meeting
The Board Meeting of a Company can be convened by a Company Secretary or a Director on the directions of the Managing Director of the Company. The procedure for convening the Board Meeting of a company is mentioned in the Articles of Association of the Company.
To convene the Board Meeting, a written notice of Board Meeting must be provided to all the Directors of the Company by giving atleast a seven day notice. A quorum of the Board is required to commence and conduct a Board Meeting. A quorum of the Board is usually established when one-third of the total strength of the Director who are in office or two Directors, whichever is higher is present.