Board of directors of IT Solutions Ltd. conducted its adjourned meeting on a public holiday in the month of October, 2015. The Board meeting was adjourned due to lack of quorum. Can the articles of association of a compa
CS Professional · Ethics, Governance and Sustainability · PYQS · December 2015
Board of directors of IT Solutions Ltd. conducted its adjourned meeting on a public holiday in the month of October, 2015. The Board meeting was adjourned due to lack of quorum. Can the articles of association of a company fix such a quorum?
Answer & Explanation:
According to Section 174 of the Companies Act 2013, one third of total strength or two directors, whichever is higher, shall be the quorum for a meeting. Directors who participate by way of Video Conferencing or other visual means shall also be counted for the purposes of quorum. Any fraction of a number is to be rounded off to one. Total strength does not include directors whose places are vacant. If the number of continuing directors is reduced below required quorum, continuing Directors may act for the purpose of increasing directors to such number which is required as quorum or for summoning a General Meeting and for no other purpose. Where at any time the number of interested directors exceeds or is equal to two thirds of the total strength of the Board of Directors, the number of directors who are not interested directors and present at the meeting, being not less than two, shall be the quorum during such time. Where a board meeting could not be held due to absence of quorum then the meeting shall be adjourned to the same day at same time and place in the next week, if that day is a National Holiday then at the next day which is not a National Holiday at same time and place. This provision is not applied if the Articles of Company provide otherwise. Further, the Articles of Association of Company can stipulate a higher quorum.
Topics: Companies Act, 2013
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