Raman (CA) (62 Points)
18 June 2010Dear colleagues,
What is the quorum for board meeting? Whether it can be increased? It seems that, according to companies act, the quorum is 1/3 rd of the total strength of board or 2 which ever is higher. Whether we can increase the quorum through amendment in Articles of association?
Thanks
Raman
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 18 June 2010
Yes Raman through amendment in article you can fix stringent quorum for your board meeting. But you can not relax the quorum through amendment in article for board meeting as desired by section 287.
Thanks
Raman
(CA)
(62 Points)
Replied 18 June 2010
Thanks for reply, Ankur. The section merely says that 1/3rd or 2 which ever is higher. It doesn't allow to increase the number through articles like sec.174 (quorum for agm) which allows articles to fix higher number. So what is the option to increase the quorum in case of board meeting?
Quorum for the Board Meeting is the subject matter of the Articles of Association, So, If You want to fix the higher no. for Quorum then, Special Resolution in the General Meeting is required..
Moreover, The Companies Act, 1956 is not the complete code, there are many major things left out from it like Bonus Issue, Right Issue, etc.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 18 June 2010
Still I’d say that you may increase the quorum through amendment in articles because increasing the quorum here means making the provisions of companies act, 1956 which is very much allowed.
Increase in quorum means –for example minimum 5 board members must be present to conduct a valid board meeting. This condition through article is very much allowed. However you can’t reduce the quorum limit below statutory minimum i.e. 1/3rd or 2 whichever is higher.
There are a few case laws for the same.
Thanks
CAclubindia
