Out of 9 directors in Rooftop Ltd., 5 are Indian nationals, 3 are foreign residents and one is a person of Indian origin. The articles of the company stipulate that quorum for a Board meeting shall be 5 directors of whic
CS Executive · Company Law · PYQS · December 2016
Out of 9 directors in Rooftop Ltd., 5 are Indian nationals, 3 are foreign residents and one is a person of Indian origin. The articles of the company stipulate that quorum for a Board meeting shall be 5 directors of which at least one director shall be a foreign resident. Referring to the provisions of the Companies Act, 2013, examine the validity of the above provision in the articles.
Answer & Explanation:
Section 174 states that quorum for a meeting of the 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. Further according to Secretarial Standard on Board Meeting (SS-1), where the Quorum requirement provided in the Articles is higher than one-third of the total strength, the company shall conform to such higher requirement. Hence, in the given case of Rooftop Ltd, the quorum as given in the Articles of the Company stands valid.
Topics: Board Meetings
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