All about Board Meeting

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All about Board Meeting

Post Updated on: 26-10-2024

In this blog post, we have provided you with all the important information related to the company board meeting, including what it means, how it must be held, and more.

According to the Companies Act, 2013, all the public limited companies and private limited companies in India are required to hold board meetings. Generally, little statutory guidance has been provided for conducting board meetings. Since there are different classes of companies, the procedure for conducting board meetings differs for these companies.

What is Board Meeting?

Meaning of Board meeting can be understood as a company meeting of the board of directors of a company held for discussing various matters and deciding on various policies of the company. This includes corporate policies and issues, company performance reports and future business goals.

Frequency for Holding the Board Meeting for Different Class of Companies

Let’s check out the frequency for holding company board meetings for different class of companies:

• One Person Company, Small Company and dormant company are required to hold at least one meeting of board of directors in each half of the calendar year. There should be a minimum gap of 90 days between two meetings.

• All the companies other than those specified above shall hold at least four boards meetings in a calendar year and the maximum gap between two meetings must not be more than 120 days.

Notice & Agenda of Board Meeting of Companies

The main purpose of a notice of the meeting of board of directors is to inform the directors that when and where the meeting will be. Agenda attached with the notice of meeting inform the directors of what is to be discussed and done at the meeting so that the directors can decide whether or not they want to attend the meeting. Usually agenda is attached with the notice. 

A notice of the meeting of the board of directors must be sent at least 7 days prior to the meeting to all the directors on their registered address through hand delivery, post or electronic mode. Inadequate notice of meeting may result in a meeting being invalid. All the directors who are entitled to attend the meeting must be well informed by giving a notice.

Company Board Meeting at Shorter Notice

A meeting of board of directors can be called by giving a shorter notice. In such case meeting shall be valid if the following conditions are satisfied:

• At least one independent director must attend the board meeting of companies in case a company is required to have an independent director. In case of absence, decision taken at such meeting must be circulated to all the directors and shall be final only ratification thereof by at least one independent director.

• If the company doesn't require having independent director than the meeting of board of directors can be called at a shorter notice without any conditions to be complied with.

Quorum of the Meeting of the Board of Directors

According to the Companies Act, 2013, quorum meaning is the minimum number of members or directors required to be present at a meeting for it to be regarded as valid. The Act mentions that the quorum for a board meeting is the higher of the following two figures: (i) 1/3rd of the total strength (ii) 2 directors.

Whether directors participate in the meeting in person or virtually through audio-visual means, either way, they’re considered to be the quorum’s part. Vacant director positions are not included in the quorum. 

If the required quorum isn’t present within 30 minutes of the scheduled start time of the meeting, then the meeting can be postponed for next week at the same place and same time. Or, it can be canceled if the meeting was called by requisitionists under section 100 of the Companies Act 2013. 

If the meeting is adjourned or rescheduled, a three days notice must be given by the company. In case the required quorum isn‘t present at the adjourned meeting as well, the members present in the meeting will be the quorum.

Who Chairs the Board Meeting?

A board meeting is chaired by a chairperson. The chairperson is required to control the meeting procedures and has to following tasks:

• Checking the minutes of previous meeting;

• Making sure proper notice is given to all the entitle directors;

• Dealing with the order of business;

• Keeping order;

• Ensuring everyone has an opportunity to speak.

Motions and Resolutions in Company Board Meeting

Generally motions and resolutions are considered the same but there is a big difference between the two. A motion is a proposal that is put before a meeting for discussion and a decision. If a motion is passed it becomes resolution. Motions are not recorded in the minutes. Motions are not binding. On the other hand, resolutions are binding and they must be recorded in the minutes books.

Minutes of Board Meeting

There is a specific requirement under the law that the company is required to keep the minutes of the board meeting. Minutes are the evidence of all the matters which are discussed and decided in the meeting. Minutes of the meetings are the conclusive evidence.

Conclusion

Conducting the board meetings is a mandatory requirement for all private limited companies and public limited companies. Such meetings must be held in a timely manner. To ensure maximum participation, a notice must be given to directors 7 days in advance. If you are a newly registered company, make sure that your company’s first board meeting is conducted within 30 days of company incorporation.

Frequently Asked Questions (FAQs)

Q1. What is the purpose of holding a board meeting?

A. Holding a board meeting allows the board of directors to make crucial decisions about company policies, strategies, financial matters, and business goals.

Q2. Who are the participants in a company board meeting?

A. Generally, a company board meeting consists of a chairperson, non-executive directors, executive directors, CS, chair of audit and risk committee, minute-taker, and CEO.

Q3. How are minutes of the board meeting documented?

A. The minutes of the board meeting can be documented in Google Docs, Microsoft Word format or as per the choice of the company’s decision-makers.

Q4. What is the minimum number of directors required for a board meeting?

A. The quorum for a meeting of the Board of Directors of a company has to be one-third of its total strength or two directors, whichever is considered higher.

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