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