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Appointment of directors

Anu K S (Cleared CA Final) (195 Points)

24 September 2016

If a director is being appointed in a particular board meeting, can such person be counted for the purpose of determining the quorum for that meeting?

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8 Replies

CA Lucky Mehta (CA in Practice) (60 Points)
Replied 24 September 2016

No he is not counted in the quorum because he has not voting right in that meeting in which he is appointed.

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Anu K S (Cleared CA Final) (195 Points)
Replied 24 September 2016

But, what if it is a government company and the director is appointed by the ministry?

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 26 September 2016

You have to check exact date of appointment. In case of nomination it may be effective from the date of issue of letter of nomination and not from the date of Board meeting. If so, he can attend the meeting as a director and it will be counted for quorum.

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Praveen Kr. Tiwary (Practicing Company Secretary) (54 Points)
Replied 26 September 2016

he shall not be counted for the purpose of quorum from the start of meeting till the conclusion of the agenda item

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Rahul Singh (cs) (308 Points)
Replied 05 October 2016

Praveen Sir,

Please explain what you want to say as your answer is contradicting to answer of p c agarwal sir.

Anticipating a favorable response.

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Praveen Kr. Tiwary (Practicing Company Secretary) (54 Points)
Replied 05 October 2016

unfortunately only half of my response has been updated on the dashboard above. seems it is due to some technical issue at my end.

what I wanted to say was that the proposed appointee (director) may join the meeting at the start as an invitee. AFTER the resolution for his appointment is passed, the members present may formally welcome him and take note of his participation in the meeting as a Director (as well as being considered for quorum purposes) only for those matters which are to be transacted AFTER his formal inclusion in the quorum and list of Directors present.

The reason for my understanding is that the law clearly provides that in a Board meeting, the quorum has to be available for each agenda item, which means that the law acknowledges that qourum can change after completion of one agenda item but before commencement of transaction of next agenda item.

Praveen Kr. Tiwary (Practicing Company Secretary) (54 Points)
Replied 05 October 2016

in continuation of above point, please also note that as rightly pointed out by P C Agarwal Sir, inclusion of a Director in quorum shall be done only after the appointment is already effective upon passing of the resolution referred in my response. So if the resolution referred in my response above provides that the effective date of appointment is after the date of the meeting, then such Director cannot be considered as part of quorum for any item to be transacted at such meeting