Under the Companies Act 2013, meetings play a crucial role in the governance and decision-making processes of companies. Meetings are essential for companies to conduct their affairs efficiently and transparently. The Act mandates various types of meetings, including Board Meetings, Annual General Meetings (AGMs), and Extraordinary General Meetings (EGMs), each serving distinct purposes.
This flash editorial will explore the different meetings and their quorum. According to the Companies Act of 2013, a company is required to conduct various types of meetings, including meetings of the Board of Directors, meetings of shareholders, and meetings of committees.
Companies and professionals often face misinterpretation regarding the number of meetings and the required quorum for those meetings. There are variations in meeting requirements according to the status of a company, such as small company, non-small company, public company, and listed company.
In addition to the regulations stated in the Companies Act of 2013, companies are required to adhere to the Secretarial Standards provided by ICSI for conducting meetings. This editorial delves into the diverse meeting requirements outlined in the Act, providing clarity on obligations and responsibilities for companies and professionals.
MEETING CHART
| Applicable Section | Type of Meeting | Timeline For Holding Meeting | Exemptions/ Relaxation if any | Quorum |
| BOARD MEETING | ||||
| Section 173 SS-1 | First Board Meeting | Within 30 days from the date of incorporation |
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One-third of the total strength of the Board,
or two Directors, whichever is higher. |
| Section 173 | Subsequent Board Meeting | Minimum 4 meetings in a year.
The gap between 2 meetings should not exceed 120 days. |
|
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| Section 173 | Subsequent Board Meeting | Minimum 2 meetings in a year. Minimum gap between both meeting 90 days. | Applicable on:
|
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| Annual General Meeting | ||||
| Section 96 | First AGM | Within 9 months from the closure of first financial Year | One Person Company | Minimum of five Members personally present and entitled to vote, in the case of a public company,
and two Members personally present and entitled to vote, in the case of a private company |
| Section 96 | Subsequent AGM | 30th Sep (Within 6 months from the closure of the financial Year)
Further the gap between 2 AGM should not exceed 15 months |
One Person Company | |
| COMMITTEE MEETING | ||||
| Clause VII of Schedule IV to the Companies Act, 2013 read with Clause 49 (II) (B) (6) of the Listing Agreement | Meeting of Independent Director | Independent Directors shall hold at least one Meeting in a financial year without attendance of Non-Independent Directors and members of management. | Applicable only on Company which required to appoint Independent Director. | There is no prescribed quorum for the meeting.
Therefore, appliance of SS-1, may be Construed as a quorum. Means, presence of all the Director. |
| Section 177 and Reg. 18 of LODR | Audit Committee meeting | Minimum 4 times in a year and gap between two meetings should not exceed 120 days | All Companies except listed.
Companies can hold the meeting as and when necessary. |
Unless otherwise stipulated in the Act or the Articles or under any other law, the Quorum for Meetings of any Committee constituted by the Board shall be as specified by the Board.
If no such Quorum is specified, the presence of all the members of any such Committee is necessary to form the Quorum |
| Section 178 and Reg. 19 of LODR | Nomination and Remuneration Committee meeting | At least once in a year. | All Companies except listed companies can hold the meeting as and when necessary. | |
| Section 178 and Reg. 20 of LODR | Stakeholders Relationship Committee meeting | At least once in a year | All Companies except listed companies can hold the meeting as and when necessary. | |
| Regulation 21 of LODR | Risk Management Committee | At least twice in a year. | All Companies except listed Companies. | one-third of the total strength of the committee, or two members, whichever is higher. |
| Section 135 | CSR Committee meeting | As and when company feel necessary. | All Companies on which CSR applicable and their CSR liability is more than 50 Lakh. | Law is also silent W.r.t. quorum for the committee meeting. But as per Secretarial Standard 1 “The presence of all the members of any Committee |
CONCLUSION:
I hope that the above post has addressed the following questions.
1. What is Quorum for CSR Committee?
2. What is the quorum for Independent Director Meeting?
3. What is Quorum for Committees under Companies Act, 2013?
4. What is quorum for Audit Committee?
5. What is the quorum for Nomination Remuneration Committee?
6. Minimum how many CSR Meeting required in a year?
7. Minimum how many Committee meetings required in a year?
The Act provides comprehensive regulations concerning the notice, quorum, conduct, and voting procedures for these meetings, guaranteeing transparency, equity, and active involvement of stakeholders.
Furthermore, it mandates that companies must keep accurate records of meeting minutes and resolutions adopted, so promoting responsibility and adherence to legal duties.
Meetings held in accordance with the Companies Act 2013 play a crucial role in decision-making, ensuring accountability, and engaging stakeholders. These meetings are essential for the efficient governance and management of companies.
Conclusion: Navigating the complexities of meeting requirements under the Companies Act 2013 is essential for companies to ensure compliance and effective governance. From Board Meetings to Committee Meetings, adherence to regulations regarding notice, quorum, and conduct is paramount. By maintaining accurate records and promoting transparency, companies can uphold their legal duties and foster stakeholder engagement, thereby facilitating efficient decision-making and management.
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Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).
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