Frequency of Meetings
Companies
Act, 2013
Dated: April 17, 2024,
Editorial No 906
BACKGROUND:
Under the Companies Act
2013, meetings play a crucial role in the governance and decision-making
processes of companies. Meetings are essential for companies to conduct their
affairs efficiently and transparently. The Act mandates various types of
meetings, including Board Meetings, Annual General Meetings (AGMs), and
Extraordinary General Meetings (EGMs), each serving distinct purposes.
This Flash editorial will
explore the different meetings and their quorum. According to the Companies Act
of 2013, a company is required to conduct various types of meetings, including
meetings of the Board of Directors, meetings of shareholders, and meetings of
committees.
Companies and
professionals often face misinterpreting regarding the number of meetings and
the required quorum for those meetings.
There are variations in meeting requirements according on the status of a
company, such as small company, non-small company, public company, and listed
company.
In addition to the
regulations stated in the Companies Act of 2013, companies are required to
adhere to the Secretarial Standards provided by ICSI for conducting meetings.
|
Applicable
Section
|
Type
of Meeting
|
Timeline For Holding
Meeting
|
Exemptions/
Relaxation if any
|
Quorum
|
|
BOARD MEETING
|
|
|
Section 173
SS-1
|
First Board
Meeting
|
Within 30 days from the date of
incorporation
|
· IFSC Public Companies
· IFSC Private Companies
· OPC having 1 Director
|
One-third
of the total strength of the Board,
or
two Directors,
whichever
is higher.
|
|
Section 173
|
Subsequent Board
Meeting
|
Minimum 4 meetings in a year.
The gap between 2 meetings should not
exceed 120 days.
|
· IFSC Public Companies
· IFSC Private Companies
· Section-8 Companies
· One Person Company,
· Small Company
· Dormant Company,
· Start-up Private Company
· OPC having 1 Director
|
|
Section 173
|
Subsequent Board
Meeting
|
Minimum 2 meetings in a year. Minimum
gap between both meeting 90 days.
|
Applicable on:
· Small Company
· One Person Company (having
more than 1 director)
|
|
Annual General Meeting
|
|
|
Section 96
|
First
AGM
|
Within 9 months from the closure of
first financial Year
|
One
Person Company
|
Minimum
of five Members personally present and entitled to vote,
in
the case of a public company,
and
two
Members personally present and entitled to vote, in the case of a private
company
|
|
Section 96
|
Subsequent
AGM
|
30th Sep (Within 6
months from the
closure of the financial Year)
Further the gap
between 2 AGM
should not exceed 15 months
|
One Person Company
|
|
COMMITTEE MEETING
|
|
|
Clause VII of Schedule IV to the
Companies Act, 2013 read with Clause 49 (II) (B) (6) of the Listing Agreement
|
Meeting of Independent Director
|
Independent Directors shall hold at
least one Meeting in a financial year without attendance of Non-Independent
Directors and members of management.
|
Applicable only on Company which
required to appoint Independent Director.
|
There
is no prescribed quorum for the meeting.
Therefore,
appliance of SS-1, may be Construed as a quorum.
Means,
presence of all the Director.
|
|
Section
177 and Reg. 18
of
LODR
|
Audit Committee
meeting
|
Minimum 4 times in a year and gap
between two meetings should not exceed 120 days
|
All Companies except listed.
Companies can hold the meeting as and
when necessary.
|
Unless
otherwise stipulated in the Act or the Articles or under any other law, the
Quorum for Meetings of any Committee constituted by the Board shall be as
specified by the Board.
If
no such Quorum is specified, the presence of all the members of any such
Committee is necessary to form the Quorum
|
|
Section
178
and
Reg. 19
of LODR
|
Nomination and
Remuneration
Committee
meeting
|
At
least once in a year.
|
All Companies except listed companies
can hold the meeting as and when necessary.
|
|
Section
178
and
Reg. 20
of LODR
|
Stakeholders
Relationship
Committee
meeting
|
At
least once in a year
|
All Companies except listed companies
can hold the meeting as and when necessary.
|
|
Regulation
21 of LODR
|
Risk Management
Committee
|
At
least twice in a year.
|
All Companies except listed
Companies.
|
one-third
of the total strength of the committee, or two members, whichever is higher.
|
|
Section 135
|
CSR Committee
meeting
|
As and when company feel necessary.
|
All Companies on which CSR
applicable and their CSR liability is more than 50 Lakh.
|
Law is also silent W.r.t. quorum for the
committee meeting. But as per Secretarial Standard 1 “The presence of all the
members of any Committee
|
CONCLUSION:
I hope that the above post has addressed the following questions.
1. What is Quorum for CSR Committee?
2. What is the quorum for
Independent Director Meeting?
3. What is Quorum for
Committees under Companies Act, 2013?
4. What is quorum for Audit
Committee?
5. What is the quorum for
Nomination Remuneration Committee?
6. Minimum how many CSR
Meeting required in a year?
7. Minimum how many Committee
meetings required in a year?
The Act provides comprehensive regulations concerning the notice,
quorum, conduct, and voting procedures for these meetings, guaranteeing
transparency, equity, and active involvement of stakeholders.
Furthermore, it mandates that companies must keep accurate records of meeting
minutes and resolutions adopted, so promoting responsibility and adherence to
legal duties.
Meetings held in accordance with the Companies Act 2013 play a crucial role in
decision-making, ensuring accountability, and engaging stakeholders. These
meetings are essential for the efficient governance and management of
companies.
Author – CS Divesh Goyal,
GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can
be contacted at csdiveshgoyal@gmail.com).
Disclaimer: The entire contents of
this document have been prepared based on relevant provisions and as per the
information existing at the time of the preparation. Although care has been
taken to ensure the accuracy, completeness, and reliability of the information
provided, I assume no responsibility, therefore. Users of this information are
expected to refer to the relevant existing provisions of applicable Laws. The
user of the information agrees that the information is not professional advice
and is subject to change without notice. I assume no responsibility for the
consequences of the use of such information.
IN NO EVENT SHALL I SHALL BE
LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM,
ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION