21 October 2013
RESPECTED SIR, PLEASE GIVE SUGGESTION HOW TO PREPARE MINUTES BOOK OF BOARD MEETING. MY CONCEPT IS NOT CLEAR REGARDING FOLLOWING THINGS: 1. QUORUM 2. LEAVE OF ABSENCE OF DIRECTOR 3.GAP BETWEEN TWO BOARD MEETINGS 4. ATTENDANCE REGISTER OF DIRECTORS MEETING HOW MANY DIRECTOR SHOULD BE PRESENT IN MEETING? QUORUM RULE? PLEASE SUGGEST ME SIR?
21 October 2013
A meeting of the Board of directors is an important forum in the working of companies. Several statutory prescriptions are incorporated in the Companies Act, 1956, to ensure that the actions approved by the Board are in the interest of the company and reflect the fiduciary nature of the duties of directors.
Periodicity of the Board Meetings Section 285 of the Act provides that every company, private or public, shall hold at least one meeting of the Board in a period of three months and four meetings in a year. There is no need to ensure a gap of not more than three months between two meetings. But in a company registered under section 25 of the Companies Act, has privileges that the Board or the Governing Body may meet at least once in six months (Notification No. SO 578, dated 8-7-1961).
In terms of the provisions of section 287 of the Companies Act, 1956, the quorum for a Board meeting shall be one-third of its total strength of directors who are in office or two directors, whichever is higher. Any fraction arising in counting of one-third will be rounded off as one. For example, in a Board having seven directors, the quorum shall be three directors. It is also provided that where the interested directors exceed or equal two-thirds of the total strength, the number of remaining disinterested directors present at the meeting being not less than two shall be the quorum of that business of the meeting. This section also applies to a private company. Section 287(2) lays down only minimum number to form a quorum; the company by its articles can provide for a higher number as quorum.
In the case of section 25 company, the Central Government has issued a Notification No. SO 1578, dated 8-7-1961, that the quorum fixed shall be either eight members or one-fourth of the total strength of the Board, whichever is less, but not less than two directors of the company.
21 October 2013
Quorum required throughout the meeting:
It has been held that the required quorum should be present throughout the continuance of the Board meeting. [Bell v Royal Western India Turf Club Ltd. AIR 1946 Bom 88] If any director leave the meeting for some moment and rejoin the meeting, it is advisable to record his period of absence in the minutes of the Board meeting for reference.
Quorum in case where all directors except one are interested:
Where all the directors except, one are interested in a matter, the only way available with the company to resolve the matter is that to call a general meeting and get the approval of members to the matter in question. Another way available is to appoint more number of directors on the Board who are not interested in a matter. [Rajan Nagindas Joshi v British Burma Petroleum Co. Ltd. (1972) 42 Comp Cas 197 (Bom)].
Leave of absence means a director who have intimated that he will not be present in the meeting. The details of such director will be given in such agenda item.
Attendance of Director:
The director who are attending the meeting of the Board will sign the register of attendance. The place of sign in Attendence Register will be mentioned "Leave of Absence" for the director who has not attended the meeting.
CAclubindia
