Out of nine directors in Moon Ltd. five are Indians and four are foreign nationals based in Indonesia. The Articles of the Company prescribe that quorum for a Board meeting will be at least 5 directors of which at two be

Section 174 of the Companies Act, 2013 deals with quorum for a Board meeting. The section states that quorum for a meeting of Board of directors of a company shall be one third of its total strength or two directors, whichever is higher. Any fraction of a number shall be rounded off as one. Thus, where a company has nine directors quorum for Board meeting shall be higher of three (1/3 of 9) or two, i.e., three directors. Accordingly, three directors shall be quorum in case of Moon Ltd. However, articles of a company can provide for a higher quorum. The quorum provided under section 174 is the minimum quorum. It is open to the company, by its articles, to indicate a higher, but not a lower number or proportion as constituting a valid quorum. Amrit Kaur Puri vs Kapurthala Flour Oil & General Mills Co. Pvt Ltd (1984) 56 Com. Cases 194 (P&H). Hence, the clause in Articles of Moon Ltd. stipulating that quorum for a Board meeting will be at least 5 directors of which two are foreign nationals is valid.