The board of directors must meet regularly to manage the company. Section 173 of the Companies Act, 2013 sets out the rules for the frequency, notice and quorum of board meetings.
The frequency
The board must meet at least four times in a calendar year, with a maximum gap of 120 days between two meetings. A small company, a dormant company and a Section 8 company can meet twice a year. An OPC can meet once a year.
The notice
The notice of the board meeting must be given at least seven days in advance. The notice must be in writing and must be sent to all directors. A shorter notice is permitted for urgent matters, but the reasons must be recorded.
The quorum
The quorum for a board meeting is one-third of the total number of directors or two directors, whichever is higher. The quorum must be present throughout the meeting.
The practical points
The company should maintain a board meeting calendar and send the notices seven days in advance. The minutes should record the attendance, the quorum and the decisions. The company should ensure that the four-meeting rule is met and that the gap between meetings does not exceed 120 days.
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