Section 174 of Companies Act, 2013 – Quorum for meetings of Board

  • Updated Till : December 04, 2024

SECTION 174. QUORUM FOR MEETINGS OF BOARD

[Effective from 1st April, 2014]

(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.

EXEMPTIONS

The following clause and Proviso shall be applicable in case of Section 8 Company vide Notification No. 466(E) dated 5th June, 2015.

The above mentioned exception shall be applicable to a Section 8 company which has not committed a default in filing its financial statements under section 137 of the said Act or annual return under section 92 of the said Act with the Registrar, vide amendment notification G.S.R. 584(E) dated 13th June 2017. 

The quorum for a meeting of the Board of Directors of a company shall be eight members or twenty five percent. of its total strength, whichever is less, 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. Provided that the quorum shall not be less than two members.

(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.

EXEMPTIONS

[1][For Private Companies, sub-section (3) of section 174 shall apply with the exception that the interested director may also be counted towards quorum in such meeting after disclosure of his interest pursuant to section 184

The above exceptions/modifications/adaptations shall be applicable to a private company which has not committed a default in filing its financial statements under section 137 of the said Act or annual return under section 92 of the said Act with the Registrar]  vide Notification No. G.S.R. 583(E) dated 13th June, 2017.

In case of a Specified private company Section 174 (3) shall apply with the exception that interested director may participate in such meeting provided the disclosure of his interest is made by the concerned director either prior or at the meeting, vide Notification no. 9(E) dated 04th January, 2017.

In case of a Specified public company Section 174 (3) shall apply with the exception that interested director may participate in such meeting provided the disclosure of his interest is made by the concerned director either prior or at the meeting, vide Notification no. 08(E) dated 04th January, 2017.

(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.

 

 

[1] Inserted in Notification No, G.S.R 464(E) dated 5th June, 2015

4 responses to “Section 174 of Companies Act, 2013 – Quorum for meetings of Board”

  1. Hi corporatelawreporter.com admin, Your posts are always well structured and easy to follow.

  2. Clintin says:

    Aw, this was an incredibly nice post. Taking the time and actual effort to make a superb article… but what can I say… I hesitate a whole lot and don’t seem to get anything done.

  3. Shondra says:

    Way cool! Some very valid points! I appreciate you writing this write-up and the rest of the website is really good.

  4. Tayna says:

    Keep this going please, great job!

Leave a Reply

Your email address will not be published. Required fields are marked *

Corporate Law Referencer

Corporate Law Referencer

Corporate Law Referencer

India’s Leading Compliance Software

India’s Leading Compliance Software

Get A Demo Today !

Recent Articles

Recent Legal updates

Recent Gst Updates