Companies act 2013
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 January 2015
can anyone explain section 173(5) of companies act, 2013 ?
in case of one person company, small company and dormant company, where at least one board meeting has been conducted during each half of the calender year and the gap between two such meetings shall not be less than 90 days, then it shall be deemed to complied with the provisions of the section.
the general rule is that minimum of 4 meetings must be held during the year and shall not be more than 120 days shall intervene between such consecutive meetings.(sec 173(1) )
so my doubt is in the case of small company, whether the company can conduct only one meeting in first half year and 2 meetings in the second half year and totally 3 board meetings in a year?
is it of sufficient compliance of the act?
in case of one person company, small company and dormant company, where at least one board meeting has been conducted during each half of the calender year and the gap between two such meetings shall not be less than 90 days, then it shall be deemed to complied with the provisions of the section.
the general rule is that minimum of 4 meetings must be held during the year and shall not be more than 120 days shall intervene between such consecutive meetings.(sec 173(1) )
so my doubt is in the case of small company, whether the company can conduct only one meeting in first half year and 2 meetings in the second half year and totally 3 board meetings in a year?
is it of sufficient compliance of the act?
22 January 2015
Yes
Section 173(1) provides that every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than 120 days shall
intervene between two consecutive meetings of the Board.
However, sub-section 5 of section 173, exempts a small company from the above requirements and provides that a small company shall be deemed to have complied with the above provisions if at least
one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than 90 days.
Section 173(1) provides that every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than 120 days shall
intervene between two consecutive meetings of the Board.
However, sub-section 5 of section 173, exempts a small company from the above requirements and provides that a small company shall be deemed to have complied with the above provisions if at least
one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than 90 days.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
22 January 2015
sir,
for suppose a small company has conducted first board meeting on 22-2-2015 which is in the first half of the calender year 2015.
second board meeting as on 2-7-2015 which is as in the second half of the calender year 2015.
now the company wants to conduct its third board meeting due to some urgent business matter and doesn't want to again have fourth meeting in the second half of the year 2015.
Q1) whether the company can go only for third meeting and without going for the third meeting?
Q2) in case the third meeting can be conducted, is it necessary to check again whether there is 90 days gap between the second and third meeting? the section doesn't require 90 days gap between two consecutive meetings. Unlike in section 173(1) the word "consecutive" is not mentioned in the section 173(5).
for suppose a small company has conducted first board meeting on 22-2-2015 which is in the first half of the calender year 2015.
second board meeting as on 2-7-2015 which is as in the second half of the calender year 2015.
now the company wants to conduct its third board meeting due to some urgent business matter and doesn't want to again have fourth meeting in the second half of the year 2015.
Q1) whether the company can go only for third meeting and without going for the third meeting?
Q2) in case the third meeting can be conducted, is it necessary to check again whether there is 90 days gap between the second and third meeting? the section doesn't require 90 days gap between two consecutive meetings. Unlike in section 173(1) the word "consecutive" is not mentioned in the section 173(5).
22 January 2015
1. Yes The companies act 2013 does not prohibit the holding maximum number of meetings
2. No. 90 days gap is provided only if 2 meetings are held in a calender year. however if more than 2 meetings are held you have to comply with the requirement of gap between 2 meetings not more than 120 days
2. No. 90 days gap is provided only if 2 meetings are held in a calender year. however if more than 2 meetings are held you have to comply with the requirement of gap between 2 meetings not more than 120 days
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