I am working for a private limited company .Our company has 11 directors. Under companies act 1956 the quorum for board meeting was 2 for our company. But under companies act 2013 the quorum is 4. Please explain with relevant sections and provisions under both acts.
05 July 2014
Quorum for Board meeting is governed by section 174 of Companies Act 2013, whereas it was section 287 under Companies Act, 1956. There is no change in quorum for Board meeting and it is same as it was there in CA 1956 i.e. The quorum for a meeting of the Board of Directors of a company shall be one-third of its total strength or two directors, whichever is higher.
So 1/3 of 11 is 3.67 and you have to round it to the next number which is 4. I hope calculation is clear now.
05 July 2014
Quorum for meetings of Board in Companies Act, 2013.
174. (1) The quorum for a meeting of the Board of Directors of a company shall be one-third of its total strength or two directors, whichever is higher, and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum under this sub-section.
(2) The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company and for no other purpose.
(3) Where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength of the Board of Directors, the number of directors who are not interested directors and present at the meeting, being not less than two, shall be the quorum during such time.
Explanation.—For the purposes of this sub-section, "interested director" means a director within the meaning of sub-section (2) of section 184.
(4) Where a meeting of the Board could not be held for want of quorum, then, unless the articles of the company otherwise provide, the meeting shall automatically stand adjourned to the same day at the same time and place in the next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday, at the same time and place.
Explanation.—For the purposes of this section,—
(i) any fraction of a number shall be rounded off as one;
(ii) "total strength" shall not include directors whose places are vacant.
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