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quorum

nidhigoel89 (Company Secretary ) (594 Points)

30 December 2010

Hello!

Pl. help me in that.

In case of a public co. where there are 3 directors. In a board meeting 2 out of 3 directors are interested. So, in that case how to comply with Sec 287.?

Regards

Nidhi

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Lakshmi (Student) (1836 Points)
Replied 30 December 2010

287. Quorum for meetings

(1) In this section-

(a) "total strength" means the total strength of the Board of directors of a company as determined in pursuance of this Act, after deducting there from the number of the directors, if any, whose places may be vacant at the time; and

(b) "Interested director" means any director whose presence cannot, by reason of section 300, count for the purpose of forming a quorum at a meeting of the Board, at the time of the discussion or vote on any matter.

(2) The quorum for a meeting of the Board of directors of a company shall be one-third of its total strength (any fraction contained in that one-third being rounded off as one), or two directors, whichever is higher :

Provided that where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength, the number of the remaining directors, that is to say, the number of the directors who are not interested [present at the meeting being not less than two], shall be the quorum during such time.

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nidhigoel89 (Company Secretary ) (594 Points)
Replied 30 December 2010

Hello!

Thanks for ur reply. Bt in my case only one director is thr who is nt interested. And as per sec 287 atleast 2 directors should b thr to form a quorum. .....................

Regards

Nidhi

Syam kamal (Company Secretary) (156 Points)
Replied 30 December 2010

After confirmation of minutes, induct one additional director who is not interested to that particular item. And if you don’t want him to be continue as director get his resignation at the end of the meeting or even after the meeting at a later date. File necessary form 32 to that effect.

nidhigoel89 (Company Secretary ) (594 Points)
Replied 30 December 2010

Hello!

So in that case u must have to appoint a additional director? There is no other alternative by which we can comply with sec 287 without appointing a AD.???????

Nidhi

Syam kamal (Company Secretary) (156 Points)
Replied 30 December 2010

According to me, no other alternative

Any other views members????

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ankit jain (CS trainee) (152 Points)
Replied 30 December 2010

Hi,

If the situation is like this then you can pass a resolution in the EGM as well for the same purpose.

If i'm wrong please give the right opinion

Thanks in advance........

Syam kamal (Company Secretary) (156 Points)
Replied 30 December 2010

Hi Ankit

Your view is highly appreciated. Such situation can also be handled in a General Meeting by an Ordinary resolution/ Special resolution if the article so require since all residual matters are supposed to vest with the general body.

Departments’ View

“The remedy in such cases seems to increase the strength of the Board by appointing disinterested directors or to co-opt or appoint additional directors if so authorized by articles who are not interested in the said contract. If this is not found practicable, it would be desirable to place the proposed contract before the general meeting for consent (Letter No. 8/16/(1) 61-PR, dated 09-05-1961)

Thanks for the info....

Regards

Syam kamal