One of the Most Important meetings in a company can be said is Board Meeting, reason being, the inception of any decision which affects the company starts from this meeting. All the brainstorming pertaining to planning till feedback of any undertaking by a company, is made vocal and communicated to all the Board members in the Board Meeting. Hence, it is important to regulate them regularly and its one of the mandatory provisions which a company needs to abide by are given under section 173 of The Companies Act, 2013 read with relevant rules. Now let us go through important aspect of same:-
- The notice of convening a Board Meeting should be given atleast seven (7) days before Board meeting in writing.
- The notice can be sent through by hand delivery or by post or by electronic means
- Independent Director presence is mandatory in meeting if any, if meeting is called at shorter notice
- The very First Board meeting to be held within 30 days from date of incorporation
- Minimum 4 meeting should be held in a year, (interpretation of year should be made accordingly)
- Not more than gap of one hundred twenty (120) days shall elapse between any two meeting
- Board meeting can be held physically or through video/ audio visual conference (if meeting to be convened through video/ audio visual conference, company needs to comply by provisions given under The Companies (Meetings of Board and its Powers) Rules, 2014) except for the matters related to
- the approval of the annual financial statements
- the approval of the Board’s report
- the approval of the prospectus
- the Audit Committee Meetings for consideration of financial statement including consolidated financial statement
- the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover
(Note that above matters can be dealt through video/audio visual conference if quorum is physically present)
Points to bear in mind:-
- The above said provisions under Companies Act, 2013 are not applicable to One Person Company (OPC), Small Company, and Dormant Company.
- A company needs to comply with provisions of Secretarial Standard – 1 as per section 118 of the Companies Act, 2013 also along with Companies Act, 2013 except one person company (OPC) or a company licensed under Section 8 of the Companies Act, 2013.
- Every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees for not complying with section 173 under The Companies Act, 2013.
- The company shall be liable to a penalty of twenty-five thousand rupees and every officer of the company who is in default shall be liable to a penalty of five thousand rupees for not observing and following Secretarial Standard – 1.
Disclaimer: The above article is extract of provision of Annual General Meeting under The Companies Act, 2013 and the interpretation is purely based on the existing information, any further amendments in provision may lead to change in its interpretation accordingly.
(The Author is Corporate Consultant and can be contacted through email id:- email@example.com)