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Quorum for Board Meeting

Meaning of Quorum in Board Meeting: 

It means the minimum number of Directors whose presence is required for a Meeting of Board of Directors of a Company.

Quorum for board meeting ( Companies act 2013 - Section174)
  • Requirements
    • Quorum of board meeting = 1/3rd (one-third) of its total strength or two directors, whichever is higher;
    • A Director participating through video conferencing / audio visual modes will also be counted for quorum;
    • Any fraction of a number shall be rounded off as one;
    • Total strength shall not include directors whose places are vacant.

  • Quorum in case Interested Directors numbers more than or equals to 2/3rd of total strength
    • In case for any agenda item of the meeting, the no. of interested directors exceeds or is equal to two-thirds of total strength of Board of Directors.
    • Then all the directors present at the meeting except interested directors (being not less than two) shall be the quorum during such time.
    • “Interested director” means a director within the meaning of sub-section (2) of section 184. 

  •  Quorum Not Present
    • In case quorum not present in a scheduled board meeting.
    • Unless the Articles of Association provides otherwise, the board meeting will be adjourned.
    • Meeting 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.
Examples
if a Company has:
(1) Four(4) Directors : Quorum will be 2. [4*1/3= 1.33 (rounded off 2)]
(2) Six(6) Directors : Quorum will be 2. [6*1/3= 2]
(3) Eleven(11) Directors : Quorum will be 4. [11*1/3= 3.67 rounded off to 4]

In Cases Interested Directors:
(4) Total 10 Directors, so Quorum will be 10*1/3=3.33 rounded off to 4. but Interested Directors are 2, then Quorum required will be (10-2)*1/3=2.67 rounded off to 3. But in case Interested Directors are 7, then Quorum i.e. (10-7)*1/3=1, one Director cannot be considered for Quorum, it has to be at least two.


Extra Notes:
  1. There is no difference between the requirements of Quorum for Board Meeting of a Public or Private Company.
  2. The Chairperson shall ensure that the required quorum is present throughout the meeting.
  3. Earlier similar provisions were prescribed under section 287 of the companies act 1956.

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