The Board of Directors planned to issue equity shares to the public and held a meeting on 15th May 2024 to approve the prospectus. Out of the 12 directors, three attended the meeting physically, and one attended via audi

Quorum for the Board meeting: As per Section 174(1) of the Companies Act, 2013, one third of total strength or two directors, whichever is higher, shall be the quorum for a Board meeting. For the purpose of determining the quorum, the participation by a director through Video Conferencing or other audio-visual means shall also be counted, unless he is to be excluded for any item of business under any provisions of the Act or the rules. Para 1.2.3 of SS-1 provides that any Director may participate through Electronic Mode in a Meeting unless the Act or any other law specifically prohibits such participation through Electronic Mode in respect of any item of business The MCA vide Notification dated June 15, 2021 has omitted Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 which was related to the matters not to be dealt with in a meeting through video conferencing or other audio-visual means. Approval of prospectus was such an item which was included in the list of restricted items prior to this notification. Accordingly, with the said amendment, now the previously restricted matters including inter alia the item of approval of the prospectus can be considered in a Board Meeting held through video conferencing or other audio-visual means. Total directors on the Board of the company are 12 and one third of them i.e. 4, being higher than 2, shall constitute the quorum. 3 directors participated in the meeting through physical presence and 1 director through electronic mode who will also be counted for the quorum making the presence of total 4 directors. Hence, the quorum in the Board meeting was present. Validity of the advice of the company: Para 1.3.4 of SS-1 provides that the Notice shall inform the Directors about the option available to them to participate through Electronic Mode and provide them all the necessary information. If a Director intends to participate through Electronic Mode, he shall give sufficient prior intimation to the Chairman or the Company Secretary to enable them to make suitable arrangements in this behalf. The Director may intimate his intention of participation through Electronic Mode at the beginning of the Calendar Year also, which shall be valid for such Calendar Year. Though such declaration shall not debar him from participation in the meeting in person, in such case a sufficient intimation of attending in person is required to be sent to the company. In view of above it is to be noted that a director is required to give sufficient prior intimation of his intension to participate in the Board meeting not necessarily at the beginning of the calendar year. In the case scenario, the director concerned has given sufficient prior intimation of his intention to participate in the Board meeting through electronic means. Hence, he will be entitled to attend the meeting through electronic means or in person as per his discretion. Giving such a notice at the beginning of the year is an enabling provision and not the mandatory requirement. Hence, the advice of the company to the director concerned to attend the meeting in person and not through electronic mode for the reason that he had not given the intimation at the beginning of the calendar year is not valid.