Manshi Baid

Quorum here means the minimum number of directors to be present at the board meeting in order to hold the board meeting. The provisions related to the minimum no. of directors i.e. quorum is provided u/s 174 of the companies Act 2013.

This section provides that the quorum of the board meeting should be 1/3rd of total strength or 2 directors whichever is higher. Total strength hereon shall not include directors whose place is vacant. However if the no. of continuing directors is less than the required quorum of the meeting then such continuing directors can hold a meeting only for two purposes :-

  1. To hold a general meeting of the company.
  2. To increase the number of directors to that fixed for the quorum

Any fraction in the number should be taken as 1. In case any director is attending meeting through video conferencing or other audio visual means then no. of these directors shall also be taken into consideration. This provision of minimum no. of director is applicable for both private as well as public company.

In case interested directors are present in the meeting and their no. is equal to or more than 2/3rd of the total strength of the board of directors then in that case the quorum of the meeting should be the number of remaining directors present at the meeting or two directors whichever is higher. Hereon also total strength shall not include directors whose place is vacant.

Now the question arises in our mind is what happens if the required quorum is not present at the meeting. Section 174(4) provides that in case the quorum is not present at the meeting then the board meeting cannot be held and will be adjourned to the same day same time and same place of the next week. In case that day is a public holiday, then to the next succeeding day which is not a public holiday. However the Article of the company can provide otherwise and in that case the AOA of the company will supersede this section.

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Category : Company Law (3486)
Type : Articles (14972)
Tags : Companies Act (1954) Companies Act 2013 (1726)

0 responses to “Section 174 of Companies Act 2013- Quorum For Board Meeting”

  1. P.Anuroop says:

    In case interested directors are present in the meeting and their no. is equal to or more than 2/3rd of the total strength of the board of directors then in that case the quorum of the meeting should be the number of remaining directors present at the meeting or two directors whichever is higher. Hereon also total strength shall not include directors whose place is vacant.

    Please could you explain the above paragraph in an easy way

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