Board Meeting is a significant event in any company be it Private, Public, Listed or Unlisted. As we know the provisions relating to Board Meetings are dealt in section 285 to 289 of the companies act. Following are the distinct provisions relating to the Board Meetings
1. Notice of Board Meeting (Section 286)
Section 286 states that notice of every meeting of Board of Directors of a company shall be given in writing to every director for the time being in India & at his usual residential address in India to every other director.
Interestingly the section does not talk about how many days’ notice is required to call for board meeting. Therefore a few minutes notice would be sufficient if all the directors agree to meet at such notice as held in[ Browne v La Trinidad (1887)37 Ch D 1 ( CA) ]. Nevertheless the section stresses on the medium of notice & which should essentially be in writing. Notice sent by telegram or telex or fax is in accordance with section 286 as held in [Ferrucco Sias v Jai Mangiram Mukhi ( 1993)12 CLA 212]
2. Agenda of Board Meeting
Agenda means plan of businesses to be transacted at the meeting. The act does not anywhere specify that Agenda should accompany with the notice of the meeting. However it is advisable to send the agenda along with the notice itself in following two cases:
i. Appointment of a person as a managing director if he is already a managing director or manager in any other company (section 316)
ii. Appointment of a person as a manager if he is already a managing director or manager in any other company (section 386)
3. Quorum for a Board Meeting
Quorum means minimum number of directors competent to transact & vote on any business in the meeting. As per section 287 (2) the quorum shall be higher of
i. One third of total strength of the Board of directors of a company or
ii. Directors
These provisions do apply to adjourned board meetings also & in the absence of any statutory provision, it is implied that an adjourned board meeting has not been exempted from the requirement of quorum. Therefore an adjourned board meeting without the quorum is not permissible under the act as decided in [Maharani Yogeshwari Kumari v Lake shore Palace Hotel Pvt Ltd (1995) 3 comp LJ 418]
4. Minutes of Board Meeting ( section 193)
Section 193 deals with minutes of the board meeting. It states that the minutes of a Board meeting shall be prepared within 30 days of conclusion of the meeting.. The signing of minutes shall be done by:
a. The chairman of the same meeting
b. The chairman of the next succeeding meeting.
The minutes of Board meeting are available for inspection of directors as decided in
[Mc Cusker v Mc Rae 1996 SC 253]. However unless the articles otherwise provide, the minutes of a Board Meeting are not open to inspection of members of the company vide Department Circular No. 8/15/196/63-PR dated 11.2.1963. Surprisingly there is no statutory provision requiring the confirmation of Minutes of Board Meeting.
5. Change in the resolution passed in Board Meeting
Changes can be made in the minutes already recorded and signed only by means of passing a fresh resolution modifying the earlier resolution as held in [Cowley & company, 1889, 42 Ch. D 209]. Therefore, a resolution passed by the board can be rescinded by passing a new resolution to the effect that the said earlier resolution is thereby rescinded.
6. Chairman’s Powers to direct certain matters to be excluded from the minutes
As per section 193, the chairman has an absolute discretion in regard to the inclusion or non –inclusion of any matter in the minutes. Nothing can be included in minutes if he opines that-
a. It is defamatory of any person or
b. It is irrelevant or immaterial or
c. It is detrimental to the interests of the company
However a chairman can not order the exclusion of matters which are relevant , are in the interest of the company & are not defamatory. Also any resolution passed at a duly convened meeting can not be excluded from the minutes
7. Quorum in case of Committee meetings
Generally the Board fixes the quorum for committee meetings at the time of their constitution. However where quorum of committee of directors is not specified, the whole of the committee must meet [Liverpool Household Stores Association Ltd (1890)59 LJ Ch 616]
Since the New Companies Bill despite of being in Pipeline stands unpassed, one can do nothing except waiting for some significant amendments which may change nature & scope of Sections 285 to 289. Till then the existing realistic provisions shall prevail over the future fantasies!
By CS PANKAJ KAMALAKAR PENDSE
ACS 30142
CAclubindia
