Quorum for board meeting companies act 1956. Section 287 in The Companies Act, 1956 2019-02-07

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Business Law Company Meetings

quorum for board meeting companies act 1956

It is not possible for the members of the company to wait for the next Annual General Meeting for clearance of such issues. The holding of board meeting through video conferencing or other audio visual means was not provided for in the erstwhile Companies Act 1956; however, in that regard the Central Government had already issued a General Circular no. Forexample, in a Board having seven directors, the quorum shall be three directors. The requisition, signed by all the requisitionists, must be deposited at the registered office of the company at least 6 weeks before the meeting in the case of resolution and not less than 2 weeks before the meeting in case of any other requisition together with a reasonable sum to meet the expenses. Please note that a resolution requiring special notice may be passed either as an ordinary resolution Simple majority or as a special resolution 75 % majority.

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Focus on Quorum for Board Meetings

quorum for board meeting companies act 1956

The rules of quorum must be maintained and the provisions of the Companies Act, 1956 and the articles must be complied with. Therefore, a proxy cannot vote on show of hands. Section 287 2 lays down only minimum number to from a quorum: the company byits articles can provide for a higher number as quorum. A body corporate which is a member of a com­pany can appoint a representative or proxy, by reso­lution of the Board. Amendment may be proposed by any member who has not already spoken on the main motion or has not previously moved an amendment thereto.

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Quorum for Board Meeting

quorum for board meeting companies act 1956

But if all the members entitled to attend and vote at the meeting agree, the report could be forwarded later also. A notice convening a general meeting must be given at least 21 clear days prior to the date of meeting. Amendment Amendment means any modification to a motion before it is put to vote for adoption. Various administrative affairs of a company, which can be transacted only by resolutions passed in general meetings, are carried out in these meetings. Provided that the quorum shall not be less than two members 2. This will be over and above the usual physical participation of the directors at the Board meeting. The court can also order compulsory winding up of the company in accordance to section 433 b of the Companies Act if the statutory meeting is not held within the prescribed time.


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General Meetings

quorum for board meeting companies act 1956

Hence if there are adjournments of board meetings due to absence of quorum, the company has to ensure that provisions of section 173 of the Companies Act 2013 {frequency of Board meeting} are continued to be complied and there is no leeway. Failure to comply with the above rules will be considered as an offence to the Companies Act by the law and will be treated as a default unless the registrar grants extension of time for holding a meeting. Only those motions which are mentioned in the agenda to the meeting can be discussed at the meeting. Where the chairman, acting bona fide within his powers, adjourns the meeting as per the view of the majority, the minority members cannot to continue with such meeting and, if they do the proceedings there will be null and void. In case that day is a public holiday it shall be held on the next succeeding day which is not a public holiday. Interval between Two Annual General Meetings As per section 166 1 of the Companies Act, the time gap between two Annual General Meetings must not exceed fifteen months.

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Business Law Company Meetings

quorum for board meeting companies act 1956

In that case, the number of directors who are not interested directors and who are also present at the Board meeting, their number being not less than two shall constitute the quorum during such time. Pasting or attaching of papers is not allowed. Proxy In case of a company having a share capital and in the case of any other company, if the articles so authorise, any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person whether a member or not as his proxy to attend and vote instead of himself. If a fraction arises during the counting of one-third, the fraction is counted as one. However, the time to hold the first Annual General Meeting for a company is relaxed to 18 months from the date of incorporation. The auditors have to certify that all information regarding calls and allotment of shares are correct. A day may be declared as a public holiday after the notice for a meeting has been issued.


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Section 174 of Companies Act, 2013

quorum for board meeting companies act 1956

Articles can provide differently It is apparent that the articles of association of a company can provide differently in case the Board meeting could not be held due to lack of quorum. Special Resolution : A special resolution is one in regard to which is passed by a 75 % majority only i. The Registrar or a contributory may file a petition for the winding up of the company if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting on or after 14 days after the last date on which the statutory meeting ought to have been held. Chairman The chairman is the head of the meeting. In case the company is not trading for profit, an income and expenditure account report must be made. Meeting of Debenture Holders 8. This is a clarificatory provision.

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Focus on Quorum for Board Meetings

quorum for board meeting companies act 1956

Motion Motion means a proposal to be discussed at a meeting by the members. Otherwise all continuing directors have to act. If there is no Chairman or he is not present within 15 minutes after the appointed time of the meeting or is unwilling to act as chairman of the meeting, the directors present may elect one among themselves to be the chairman of the meeting. It is generally not necessary, and in fact brought with the risk of unpredictable consequences, torecord the discussion which led up to the adoption of a certain resolution or making of a certaindecision. No­tice is given to members but circulars are given to customers and public.

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Section 174 of Companies Act, 2013

quorum for board meeting companies act 1956

The Court has no power to direct the calling of the Annual General Meeting. A company is considered as a legal entity separate from its members in the eyes of law. 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. Either form of recording the resolution is acceptable. Decisions are made according to the view of the majority. Where the number of directors was reduced below the quorum, the directors couldnot act.

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Quorum for Board Meeting

quorum for board meeting companies act 1956

Generally, at the time of nomination of directors on Board byfinancial institutions, banks, etc. At the next meeting, the minutes of the earlier meeting recorded in the book,are adopted by the Board and in token thereof, the chairman signs the minutes with the date. Department hasclarified vide Letter No. Meetings of creditors may be called for this purpose. Minutes must be signed latest on the date of the next succeeding meeting of the Board.

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