Gap between meetings in a small company

Meetings 510 views 9 replies

Geetha Gupta

Accountant

325 Points Posted on 13 April 2017

Dear All,

As per sec 173, the BOD of a company should meet 4 times a year with a gap of less than 120 days between consecutive meetings.

Would this mean that if a company meets only 4 times a year, with all meetings in one calendar half of the year and no meetings in the other half and there will be full compliance with sec 173?

Would the answer be different if the company in question is a small company - since the requirement of holding only 2 meetings in a year with a meeting in each calendar half with a gap of minimum 90 days is only deemed compliance. that is if a small company holds 4 meetings all in one calendar half, would it be compliance with sec 173?

Regards,

Geetha

Replies (9)

Ashok Kumar

CA qualified

389 Points Posted on 13 April 2017

if all 4 meetings are held in one calendar half, then gap between 4th meeting and next

Ashok Kumar

CA qualified

389 Points Posted on 13 April 2017

will be more than 120 days. also min between 2 meetings in case of small companies shud be 90 days. also Secretarial standard - 1 shud be adhered to

Geetha Gupta

Accountant

325 Points Posted on 15 April 2017

Thanks for this clarification, Ashok ji

Regards,

Geetha

Ajit Hegde

CA - Final

1367 Points Posted on 16 April 2017

I do not agree with the above view. Section 173(1) specifies -every year. Hence 4th meeting will not be counted for 1st meeting of next year.

Also, 173(5) is a deeming provision. If you are complying with 173(1), 173(5) should not apply.

Geetha Gupta

Accountant

325 Points Posted on 19 April 2017

Yes Ajit Ji, in fact i too tend to have the same view as you do. I asked the ques for clarifiying my views on this.

I feel 173(1) applies to all companies, even for small dormant or one person companies.

Relaxation of 173(5) applies only in those cases, for small dormant or one person companies, where there is not much activity and therefore there is not enough reason for the Board to meet so often. In such cases they may get away with holding just 2 meetings, one in each calendar half of the year, at least 90days apart and still be deemed to have complied with this section.

Regards,

Geetha

Ajit Hegde

CA - Final

1367 Points Posted on 19 April 2017

Correct. 173(5) is a benefit that can be taken. Thats it. It cannot be said to be complied along with 173(1).

Ashok Kumar

CA qualified

389 Points Posted on 19 April 2017

But SS-1 states that board shall meet atleast once in every calendar quarter and the same exemption as 173(5) is available in that standard. It cannot be said to be inconsistent with the act, Thus, the above situation will not be sufficient compliance

Ajit Hegde

CA - Final

1367 Points Posted on 19 April 2017

I correct myself on quarterly requirement. Mr. Ashok is right.

Guidance note also requires meetings to be held in each quarter. Also the interpretation of year is calender year as per the guidance note.