Under the Companies Act, 2013, Board Meetings can be validly conducted with participation of non-resident directors through video conferencing or other audio-visual means, as permitted under Section 173(2) read with applicable rules. Such participation is treated as valid for quorum under Section 174, provided procedural requirements such as notice, roll call, identification, and proper recording of proceedings are complied with. The requirement of having at least one resident director under Section 149(3) must also be fulfilled. Separately, regarding attendance, Section 167(1)(b) provides that a director’s office becomes vacant if they fail to attend any Board Meeting for a continuous period of twelve months. While no minimum number of meetings is prescribed annually, a director must attend at least one meeting within twelve months, including via video conferencing, to retain office. There is no upper limit on the number of meetings a director may attend.
Conduct of Board Meetings where majority of Directors are Non-Residents
This is with reference to the query regarding the conduct of Board Meetings of a company wherein two of the Directors are foreign nationals residing outside India and are unable to attend meetings physically in India.
Upon examination of the relevant provisions of the Companies Act, 2013 (“the Act”) read with the Companies (Meetings of Board and its Powers) Rules, 2014, we provide our opinion as under:
1. As per Section 173(2) of the Companies Act, 2013, the participation of Directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed, capable of recording and recognizing the participation of the Directors and of recording and storing the proceedings of such meetings.
2. Further, Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 prescribes the procedure for conducting Board Meetings through video conferencing or other audio-visual means. The said provisions permit Directors to participate in Board Meetings from any location, including outside India, subject to compliance with the prescribed procedures.
3. Accordingly, the presence of foreign Directors through video conferencing or other audio-visual means shall be deemed as valid participation for the purpose of quorum under Section 174 of the Act.
4. The Company is required to ensure compliance with procedural requirements, including issuance of proper notice, conducting roll call, ensuring identification of participants, and maintenance of minutes in accordance with the provisions of the Act and applicable Secretarial Standards.
5. Further, the requirement under Section 149(3) of the Act regarding the appointment of at least one resident Director in India remains duly complied with.
Conclusion:
In view of the above, it is opined that the Company may validly convene and conduct its Board Meetings through video conferencing or other audio-visual means, and the participation of foreign Directors from outside India shall be legally valid, provided that the provisions of the Companies Act, 2013 and the relevant Rules are duly complied with.
This opinion is based on the facts and information provided and is subject to applicable laws and regulations in force.
Requirement of Attendance of Board Meetings by Directors under the Companies Act, 2013
This is with reference to the query regarding the minimum number of Board Meetings required to be attended by a Director in a financial year under the provisions of the Companies Act, 2013.
Upon examination of the relevant provisions of the Companies Act, 2013 (“the Act”), we provide our opinion as under:
1. As per the provisions of Section 167(1)(b) of the Companies Act, 2013, the office of a Director shall become vacant if he/she absents himself/herself from all the meetings of the Board of Directors held during a period of twelve months, with or without seeking leave of absence from the Board.
2. On a combined reading of Section 167(1)(b) and Section 173 of the Act, it is observed that while the law prescribes the minimum number of Board Meetings to be conducted by a company, it does not prescribe a specific minimum number of meetings to be attended by a Director in a financial year.
3. However, in effect, the requirement under Section 167(1)(b) mandates that a Director must attend at least one Board Meeting in a period of twelve months in order to continue to hold office as a Director of the Company.
4. It is further clarified that attendance through video conferencing or other audio-visual means, as permitted under Section 173(2) of the Act read with the applicable rules, shall be considered as valid attendance for the purpose of the aforesaid requirement.
5. There is no maximum limit prescribed under the Act with respect to the number of Board Meetings that may be attended by a Director.
Conclusion:
In view of the above, it is opined that a Director is required to attend at least one Board Meeting in a period of twelve months to avoid vacation of office under Section 167(1)(b) of the Companies Act, 2013. There is no restriction on the maximum number of Board Meetings that a Director may attend.
This opinion is based on the facts and information provided and is subject to applicable laws and regulations in force.
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