Can interested director be counted for constituting quorum?

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Dear Mr. Mandar

Thanks for your reply.

But Please see the Notification dated 05.06.2015 Point No.13. It Exempts Section 184(2).

As per the Notification dated 05.06.2015, Interested Directors may participate in the Board Meeting in which they are interested after disclosing their interest at the meeting.

Further, the Directors are also shareholders in the Company but I do not see a problem in that since as per the Notification dated 05.06.2015, second proviso to sub-section (1) of section 188 shall not apply to Private Companies, i.e. a member of the company can vote on special resolution to approve any contract or arrangement which may be entered into by the company, if such member is a related party.

The Company is not willing to appoint any Additional Director.

I would like to stress on the point that Section 174(3) provides that “Interested Director” means a director within the meaning of Section 184(2). Therefore, where Section 184(2) itself is exempted for Private Companies, then Interested Director can be counted for the purpose of quorum.

They can surely be counted for the Quorum. E.g. If two directors are there, and both are interested in specific contract, they can pass resolution for such contract after disclosing their interest.

Intention of giving exemption is to ensure that atleast closly held company (pvt co) will be able to pass resolutions, because Pvt Co usually have transactions with related parties.

Yes, i think Pratik is right.

I have one query

Interested Directors can disclose their interest in Form-MBP 1 ????

If they have already disclosed their interest as per Section 184 in Form MBP-1 at the first board meeting of Financial year, they do not need to again give MBP-1 again for this meeting. Such directors just need to intimate about their interest for such contract.  So that, the Company will be able to take note of Directors' interest in the minutes of such meeting. However, it would be good if they give disclosure in MBP-1.

A company having two directors A & B, and they are husbund and wife, now they want appoint their son on the Board of the Company. can they appoint in the Board meeting as an Additional Director?

Thanks

Yes.100%. They can appoint their Son as Additional Director.

Thanks Pratik Shah

Hi everybody,

Ques 1.

Quoting 

"A company having two directors A & B, and they are husbund and wife, now they want appoint their son on the Board of the Company."

Assume this is a private limited company.

So the ques is - In this situation, even if all the directors are interested parties, can they be the quorum in the board meeting because of the Notification dated 05.06.2015 Point No.13 which Exempts Section 184(2). Only that they need to mention their interest to the board ??

if so, what would the wordings be - to indicate the interest 

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Ques 2. If the husband and/or wife want to transfer some shares to the son, again the husband and wife will be interested directors. Will they be quorum in the board meeting to approve the resolution for transfer of shares?

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Regards,

Geetha