{"id":18838,"date":"2023-03-28T11:39:13","date_gmt":"2023-03-28T06:09:13","guid":{"rendered":"https:\/\/gstguntur.com\/?p=18838"},"modified":"2023-05-10T15:48:01","modified_gmt":"2023-05-10T10:18:01","slug":"meetings-of-board-and-its-powers-ca-final-law-study-material","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/meetings-of-board-and-its-powers-ca-final-law-study-material\/","title":{"rendered":"Meetings of Board and its Powers \u2013 CA Final Law Study Material"},"content":{"rendered":"

Meetings of Board and its Powers \u2013 CA Final Law Study Material<\/a> is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

Meetings of Board and its Powers \u2013 CA Final Law Study Material<\/h2>\n

Question 1.
\nABC Limited, a public limited company was incorporated on 1st April, 2020. The company has conducted four Board meetings during the financial year 2020-21 i.e. on 6th April, 2020, 28th August, 2020, 30th September, 2020 and 30th March, 2021.
\n(i) Has the company contravened the provisions of the Companies Act, 2013 in respect of the conduct of the meetings?
\n(ii) Will your answer differ if the company was incorporated under Section 8 of the Companies Act, 2013? [Nov. 16 (4 Marks)]
\nAnswer:
\nConduct of Board Meeting:<\/p>\n

As per Sec. 173 (1) of the Companies Act, 2013, every company shall hold the first meeting of the BOD within 30 days of the date of its incorporation and thereafter hold a minimum number of 4 meetings of its BOD every year in such a manner that not more than 120 days shall intervene between two consecutive meetings of the Board.<\/p>\n

However, the C.G. had notified that in case of Sec. 8 companies which has not committed a default in filing of its financial statements u\/s 137 or annual return u\/s 92 with the Registrar, Sec. 173(1) shall apply only to the extent that the BOD of such companies shall hold at least 1 meeting within 6 calendar months.<\/p>\n

In the present case, ABC Ltd. was incorporated on 1st April, 2020 and conducted 4 Board meetings during the financial year 2020-21 on 6th April, 2020, 28th August, 2020, 30th September 2020 and 30th March 2021.<\/p>\n

Conclusions: Considering the provisions of Sec. 173(1), following conclusions may be drawn:<\/p>\n

(i) Company has contravened the provisions of Sec. 173(1) of the Companies Act, 2013 in respect of the conduct of the subsequent board meetings. The gap between 2 consecutive board meetings i.e. the meeting held on 6th April, 2020 and 28th August, 2020 is 143 days which is more than 20 days and similarly the gap between the meeting held on 30th Sep. 2020 and 30th March 2021 is 181 days which is again more than 120 days.<\/p>\n

(ii) In the case of company incorporated u\/s 8 of the Companies Act, 2013, since the board meetings have been conducted within every 6 calendar months, so there is no contravention of the provision related to holding of bod meetings.<\/p>\n

Question 2.
\nThe Board of Directors of InfoTech Consultants Limited, registered in Kolkata, proposes to hold the next board meeting in the month of Dec., 2020. They seek your advice in respect of the following matters:
\n(i) Can the board meeting be held In Chennai through video conferencing, when all the directors of the company reside at Kolkata?
\n(ii) Is It necessary that the notice of the board meeting should specify the nature of business to be transacted? [RTP – May 19]
\nAnswer:
\n(i) Place for conduct of Board Meetings:<\/p>\n

Companies Act, 2013 does not provide any provisions as to conduct of board meetings at any particular place. Sec. 173 of Companies Act, 2013 provides the provisions for holding meetings by video conferencing, sending notices, procedures at the meeting etc.<\/p>\n

Conclusion: Board meeting can be held at Chennai even if all the directors of the company reside at Kolkata and the registered office is situated at Kolkata provided other requirements of Sec. 173 are complied with.<\/p>\n

(ii) Requirements w.r.t. Notice of Board Meetings:<\/p>\n

Sec. 173(3) of the Companies Act, 2013 provides that a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company.<\/p>\n

There is no provision in the Companies Act, 2013 as to laying down the contents of the notice. Hence, it may be construed that notice may be interpreted as intimation of the meeting and does not necessarily include the sending of the Agenda of the meeting.<\/p>\n

However, considering the importance of Board Meetings and the responsibilities placed on the directors for decisions taken at the meetings, it is inevitable for them to be properly prepared and informed about the items to be discussed at the Board Meetings. As a matter of good secretarial practice, the notice should include full details and particulars of the business to be transacted at the Board Meetings.
\nThe articles of association of the company may make it mandatory to do so.<\/p>\n

\"Meetings<\/p>\n

Question 3.
\nXYZ Ltd. is a foreign collaborator in ABC Ltd. incorporated in India under the Companies Act, 2013. The foreign collaborator holds 49% of the shareholding. The Board meetings of ABC Ltd are usually held in India and sometimes meetings of the Board are called at a very short notice for which there is a provision in the Articles of Association that during such situations notices of the meetings of the Board can be sent by e-mail. State in this connection whether such a provision in the Articles of Association of a foreign collaborated company is valid.
\nAnswer:
\nRequirements of Notice of Board Meetings:<\/p>\n

As per Sec. 173 (3) of the Companies Act, 2013, a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company and stich notice shall be sent by hand delivery or by post or by electronic means.<\/p>\n

Proviso to Sec. 173(3) provides that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.<\/p>\n

Conclusion: From the examination of provisions of Sec. 173(3), it can be concluded that the notice of a Board meeting may be send by e-mail. However, shorter notice is legally permitted with the condition being the presence of the quorum and at least one independent director. The provision of the Articles in this regard is not relevant as the position is amply clear in the Act itself.<\/p>\n

Question 4.
\nMr. P and Mr. Q who are the directors of the Company informed the Company their inability to attend the meeting because the notice of the meeting was not served on them. Discuss whether there is any default on the part of the Company and the consequences thereof.
\nAnswer:
\nConsequences of non serving the notice of board meetings:<\/p>\n

As per Sec. 173(3) of the Companies Act, 2013, a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.<\/p>\n

Section 173(4) provides that every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of \u20b9 25,000.<\/p>\n

Companies Act, 2013 does not lay down any specific provision regarding the validity of a resolution passed by the Board of Directors in case notice was not served to all the directors as stipulated in the Act. However, Supreme Court, in case of Parmeshwari Prasad v. Union of India has held that the resolutions passed in the board meeting shall not be valid, since notice to all the Directors was not given in writing. Notice must be given to each director in writing. Hence, even though the directors concerned knew about the meeting, the meeting shall not be valid and resolutions passed at the meeting also shall not be valid.<\/p>\n

In the given case no notice, was served on Mr. P and Mr. Q who are the directors of the company.<\/p>\n

Conclusion: Meeting shall not be considered as valid and the resolutions passed at the meeting also shall not be valid. Every officer of the company responsible for the default shall be punishable with fine of \u20b9 25,000.<\/p>\n

Question 5.
\nA director goes abroad for a period of more than 3 months and an alternate director has been appointed in his place u\/s 161(2). During the period of absence of the original director, a board meeting was called. In this connection, with reference to the provisions of the Companies Act, 2013, advise whom should the notice of Board meeting be given to the “original director” or to the “alternate director\u201d?
\nAnswer:
\nRequirements of Notice of Board Meetings:<\/p>\n

Section 161(2) of the Companies Act, 2013 provides that the Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence for a period of not less than 3 months from India.<\/p>\n

Section 173(3) provides that a meeting of the Board shall be called by giving atleast a 7 days\u2019 notice in writing to every director to his registered address with the company and such notice shall be sent by hand delivery or by post or by electronic means.<\/p>\n

In the present case, a director goes abroad for a period of more than 3 months and an alternate director has been appointed in his place u\/s 161(2). During the period of absence of the original director, a board meeting was called.<\/p>\n

Conclusion: There is no legal precedence whether the notice of the meeting is to be sent to the original director or the alternate director. But as matter of prudence the notice of the meeting may be served to both the alternate director as well as the original director who is for the time being outside India.<\/p>\n

\"Meetings<\/p>\n

Question 6.
\nABC Ltd. has 12 directors on its Board and has the following clause in its Articles of Association:
\n“The questions arising at any meeting of the Board of Directors or any Committee thereof shall be decided by a majority of votes, except in cases where the Companies Act, 2013 expressly provides otherwise.”<\/p>\n

In one of the meetings of the Board of Directors of ABC Ltd., 8 directors were present. After completion of discussion on a matter, voting was done. 3 directors voted in favour of the motion, 2 directors voted against the motion while 3 directors abstained from voting.<\/p>\n

You are required to state with reference to the provisions of the Companies Act, 2013 whether the motion was carried or not. It is clarified that the motion being voted upon was not concerning a matter which requires consent of all the directors present in the meeting. [May 09 (5 Marks)]
\nAnswer:
\nVoting at a Board Meeting:<\/p>\n

Regulation 68 of Table F of Schedule 1 to the Companies Act, 2013 provides that save as otherwise expressly provided in the Companies Act, 2013, questions arising at any meeting of the Board shall be decided by a majority of votes.<\/p>\n

In the present case, similar clause exists in the Articles of Association of ABC Ltd. 8 directors out of a total strength of 12 directors were present and out of those 8 directors only 5 directors have exercised their votes. In such a case, only those directors who are present and vote on a motion are considered for determining whether the motion is carried or not. That means out of the 5 directors who voted on the motion are to be considered. Directors who did not vote will not be counted as either having voted in favour or against. Their votes will be disregarded.<\/p>\n

Conclusion: Since number of directors who voted in favour of the motion being 3, is higher than the number of directors who voted against the motion being 2, the motion is carried or is considered to be passed by majority.<\/p>\n

Question 7.
\nExamine with reference to the provisions of the Companies Act, 2013 whether notice of a Board Meeting is required to be sent to the following persons:
\n(i) Alternative Director;
\n(ii) An interested Director;
\n(iii) A Director who has expressed his inability to attend a particular Board Meeting;
\n(iv) A Director who has gone abroad (for less than 3 months). [May 13 (8 Marks), MTP – Oct. 18]
\nAnswer:
\nNotice of Board meeting:
\n(i) Alternate Director: Sec. 173(3) of the Companies Act, 2013 makes it mandatory for every director to be given proper notice of every board meeting. There is no legal precedence whether the notice of the meeting is to be sent to the original director or the alternate director. But as matter of prudence the notice of the meeting may be served to both the alternate director as well as the original director who is for the time being outside India.<\/p>\n

(ii) Interested director: In case of an Interested Director, notice must be given to him even though he is precluded from voting at the meeting on the business to be transacted. It is immaterial whether a director is interested or not.<\/p>\n

(iii) A Director who has expressed his inability to attend a particular Board Meeting: In terms of section 173(3) even if a director states that he will not be able to attend the next Board meeting, notice must be given to that director.<\/p>\n

(iv) A director who has gone abroad: A director who has gone abroad is still a director. Therefore, he is entitled to receive notice of board meetings during his stay abroad.<\/p>\n

Question 8.
\nElaborate the provisions of the Companies Act, 2013 regarding Notice of Board Meeting. Draft a notice for the first meeting of the Board of Directors of India Timber Ltd. [Nov. 15 (8 Marks)]
\nAnswer:
\nNotice of Board Meeting:
\nSection 173(3) of the Companies Act, 2013 deals with the provisions relating to notice of Board Meetings. According,-<\/p>\n

A meeting of the Board shall be called by giving not less than seven days\u2019 notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means:<\/p>\n

Provided that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting:<\/p>\n

Provided further that in case of absence of independent directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any.<\/p>\n

Rule 3 of The Companies (Meetings of Board and its Powers) Rules, 2014, further provides that the notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio-visual means and shall provide all the necessary information to enable the directors to participate through video conferencing mode or other audio visual means.<\/p>\n

As per section 173(4) of the Companies Act, 2013, every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of \u20b9 25,000.<\/p>\n

Draft Notice:<\/p>\n

India Timber Limited
\nAddress: ________<\/p>\n

Dated _______
\nTo
\nMr. ________
\nAddress: _______
\n__________ (each director to be addressed individually)<\/p>\n

Dear Sir,
\nNotice is hereby given that first meeting of the Board of Directors will be held at the registered office of the company at _____(address) ____ (place) on ____ (day), the ____ (date) at ____ AM\/PM.
\nYou are requested to make it convenient to attend the meeting. An option is also available to you to participate in the Board Meeting through video conferencing or audio-visual means. Kindly communicate your preference in this regard.
\nA copy of the agenda of the meeting is enclosed for your perusal.
\nYours faithfully,
\nFor India Timber Ltd.<\/p>\n

(Secretary)
\nEnel: A copy of agenda of the meeting.<\/p>\n

\"Meetings<\/p>\n

Question 9.
\nWhat are the conditions to he fulfilled for calling meetings at shorter notice than as prescribed by Companies Act, 2013.
\nOne of the directors, a senior professional, objected to receiving the notice by e-mail. Advise him. (May 16 (4 Marks))
\nAnswer:
\nRequirements of Notice of Board Meetings:<\/p>\n

As per Sec. 173(3) of the Companies Act, 2013, a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.<\/p>\n

Proviso to Sec. 173(3) provides that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.<\/p>\n

Conclusion: Considering the provisions of Sec. 173 (3) it can be concluded that the senior Director\u2019s objections to receiving the notice by email is not sustainable.<\/p>\n

Question 10.
\nExamine the following with reference to the provisions of the Companies Act, 2013:
\n(a) The Chairman of Evergreen Limited convened a board meeting and two weeks’ notice was served on all directors of the company. Two of the independent directors on the board objected on the grounds that no proper agenda for the meeting was circulated.
\n(b) Sunshine Limited proposes to hold its board meeting at a shorter notice through video
\nconferencing. |May 17 (4 Marks), RTP-May 18]
\nAnswer:
\n(a) Requirement of Agenda for Board Meetings:<\/p>\n

As per section 173(3) of the Companies Act, 2013, a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means.<\/p>\n

The Companies Act, 2013 does not specifically provide for sending agenda along with the notice of the meeting. However, generally as a good secretarial practice, the notice is accompanied with the agenda of the meeting.<\/p>\n

In the present case, 2 of the independent directors on the Board has objected on the grounds that no proper agenda for the meeting was circulated.<\/p>\n

Conclusion: Contention of the independent directors objecting on the grounds that no agenda for the meeting was circulated, does not hold good. Hence, the meeting shall be valid.<\/p>\n

(b) Board meeting at a shorter notice through video conferencing:
\nSec. 173(2) and 173(3) of the Companies Act, 2013 provides the following provisions in relation to conduct of Board meeting at a shorter notice and through video conferencing. Accordingly,<\/p>\n

The participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.<\/p>\n

A meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company. Provided that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.<\/p>\n

Further, in case the independent directors are not present at such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any.<\/p>\n

Conclusion: Sunshine Limited can hold a board meeting at a shorter notice through video conferencing, subject to compliance of Section 173(2) and 173(3).<\/p>\n

Question 11.
\nMoonlight Limited, held its Board meeting through video conferencing. Due to technical problems, the video recording which was done could not be retrieved. The company seeks your advice for the preparation and recording of the minutes of the board meeting in the above situation, under the provisions of the Companies Act, 2013 and Rules made thereunder. [May 18 – Old Syllabus (4 Marks)]
\nAnswer:
\nPreparation and Recording of Minutes of Board meeting held through vide conferencing:
\nRule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 provides the provisions relating to conduct of board meetings through video conferencing or other audio-visual means. Accordingly,<\/p>\n

At the end of discussion on each agenda item, the Chairperson of the meeting shall announce the summary of the decision taken on such item along with names of the directors, if any, who dissented from the decision taken by majority and the draft minutes so recorded shall be preserved by the company till the confirmation of the draft minutes.<\/p>\n

The draft minutes of the meeting shall be circulated among all the directors within 15 days of the meeting either in writing or in electronic mode as may be decided by the Board.<\/p>\n

Every director who attended the meeting, whether personally or through video conferencing or other audio-visual means, shall confirm or give his comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the draft minutes, within 7 days or some reasonable time as decided by the Board, after receipt of the draft minutes failing which his approval shall be presumed.<\/p>\n

In the present case, due to technical problems, the video recordings of a Board meeting of Moonlight Limited, could not be retrieved and the company seeks advice for the preparation and recording of the minutes of the board meeting.<\/p>\n

Conclusion: The secretary of Moonlight Limited in consultation with the Chairman of the meeting can use the draft minutes that would have been recorded during the meeting to prepare the minutes. Further, when the same minutes will be circulated to the directors, they can give comments in writing, about the accuracy of recording of the proceedings of that particular meeting in the minutes, within 7 days or some reasonable time as decided by the Board, after receipt of the draft minutes.<\/p>\n

Question 12.
\nM\/s OBC Limited, at its forthcoming Board meeting decide that it will not provide the directors with the facility of participation in the said meeting through electronic mode; can the directors insist on attending the meeting through such mode? Decide as per the provisions of the Companies Act, 2013. Will your answer differ, if a Director participates in a Board Meeting through electronic mode from his end, even if the company does not provide such facility? [Nov. 18-Old Syllabus (4 Marks)]
\nAnswer:
\nParticipation in Board Meeting through electronic mode:<\/p>\n

As per Sec. 173(2) of the Companies Act, 2013 the participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.<\/p>\n

Proviso to Sec. 173 provides that C.G. may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio-visual means. However, in this case also, if quorum exist in the meeting through physical presence of directors, any other director may participate through video conferencing or other audio-visual means.<\/p>\n

Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 requires that every company shall follow the procedure and make necessary arrangements for convening and conducting the Board meetings through video conferencing or other audio-visual means.<\/p>\n

In the present case, M\/s OBC Limited, at its forthcoming Board meeting decide that it will not provide the directors with the facility of participation in the said meeting through electronic mode.<\/p>\n

It appears from the provisions of law that company is not having any option whether to allow the directors the facility of participation in Board meeting through electronic means or not. They are bound to make necessary arrangements. It is at the option of the directors whether to attend the meeting in person or through video conferencing or other audio-visual means.<\/p>\n

Conclusion: Considering the requirements of Sec. 173(2) and Rule 3 as stated above, it can be concluded that directors can insist the company on attending the meeting through electronic mode. Hence the demand of the question in a situation when the company does not provide such facility is of no relevance.<\/p>\n

Note: Answer given in Suggested answer of Board of Studies of ICAI is different stating that Rule 3 is to be complied with only if a company provides the facility of participation through electronic mode but it is not his right. This option may be exercised by the director only when this facility is provided by the company to its directors.<\/p>\n

If the company has not offered to provide facility of participation through electronic mode and the director insists to attend the meeting through electronic mode, the company may decide whether to provide the same or not Thus, it is not mandatory for companies to provide their directors with the facility of participation in meetings through electronic mode and therefore, the director cannot insist.<\/p>\n

\"Meetings<\/p>\n

Question 13.
\nWonderland Ltd. convened a meeting of the Board of Directors on 1st September 2020 to approve the financial statements of the Company as on 31st March, 2020. The Board has strength of 5 directors and the quorum as per Articles of Association is 3 directors physically present. While 3 directors participated in the meeting physically, the fourtli and the fifth directors participated through video conferencing. Examine the validity of the approval of financial statements in the above said Board meeting. [Nov. 19 – Old Syllabus (4 Marks)]
\nAnswer:
\nParticipation in Board Meeting through electronic mode:
\nAs per Sec. 173(2) of the Companies Act, 2013 the participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time.<\/p>\n

First Proviso to Sec. 173 provides that C.G. may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio-visual means.<\/p>\n

Second Proviso to Sec. 173 further provides that where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio-visual means in such meeting on any matter specified under the first proviso.<\/p>\n

Approval of Financial statements is one of the matters which is being covered in Rule 4 of Companies (Meetings of the Board and its Powers] Rules, 2014, which cannot be dealt with in a meeting through video conferencing. However, where there is quorum presence in a meeting through physical presence of directors, any other director may participate conferencing through video or other audio-visual means.<\/p>\n

Conclusion: As there is Quorum in a meeting through physical presence of directors, any other director may participate through video conferencing. Hence the financial statements are approved validly.<\/p>\n

Question 14.
\nYou are the CFO and in-charge of compliances of a listed entity. The Company is professionally managed and has earned a niche In the market for Its robust management practices. Mr. Edward, an eminent American business man, currently living \u00a1n Germany, joined the Company as an Executive Director. On assuming his mantle, he being a foreign director residing abroad, approached you to specifically understand the relevant provisions of the Companies Act, 2013 relating to participation of directors in Board Meetings conducted through Video Conferencing in respect of the following matters:<\/p>\n

(i) What shall be the venue of Board Meeting through video conference?
\n(ii) How the statutory registers placed at the scheduled venue of the meeting shall deemed to have been signed by the directors participating through electronic mode?
\n(iii) Whether meetings can be convened through audio\/teleconferencing i.e. without video facility?
\nYou are required to provide correct legal-position to the above queries after examining and evaluating the provisions of the Companies Act, 2013. [Nov. 20 – New Syllabus (6 Marks)]
\nAnswer:
\nConduct of Board Meetings:
\nRule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, requires the company to comply with the procedure in case of Board Meetings through video conferencing or other audiovisual means.<\/p>\n

(i) Venue of Board meetings:
\nWith respect to every meeting conducted through video conferencing or other audio-visual means authorised under these rules, the scheduled venue of the meeting as set forth in the notice convening the meeting, shall be deemed to be the place of the said meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.<\/p>\n

(ii) Signing of Statutory Registers:
\nThe statutory registers which are required to be placed in the Board meeting as per the provisions of the Act shall be placed at the scheduled venue of the meeting and where such registers are required to be signed by the directors, the same shall be deemed to have been signed by the directors participating through electronic mode, if they have given their consent to this effect and it is so recorded in the minutes of the meeting.<\/p>\n

(iii) Conducting meetings through audio conferencing:
\nAs per Sec. 173(2) of Companies Act, 2013, the participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio-visual means, as may be prescribed.<\/p>\n

“Video conferencing or other audio-visual” means audio-visual electronic communication facility employed which enables all the persons participating in a meeting to communicate concurrently with each other without an intermediary and to participate effectively in the meeting.
\nHence, meetings cannot be convened through audio\/teleconferencing i.e. without video facility.<\/p>\n

\"Meetings<\/p>\n

Question 15.
\nDiscuss the following situations with respect to the quorum.
\n(a) There are 9 directors in a company and out of which 2 offices of the directors have fallen vacant.
\n(b) There are 15 directors in a company and during discussion of a particular item, 13 of the directors are said to be ‘interested’ within the meaning of section 184(2) of the Companies Act, 2013.
\nAnswer:
\nRequirements as to quorum of a Board Meeting:<\/p>\n

(a) As per Sec. 174(1) of the Companies Act, 2013, the quorum for a meeting of the Board of Directors of a company shall be 1\/3rd of its total strength or 2 directors, whichever is higher. For this purpose, any fraction of arnumber shall be rounded off as one and total strength shall not include directors whose places are vacant.
\nIn the present case, quorum shall be higher of 1\/3rd of 7, i.e. 2.33, rounded off as 3 or 2 directors. Therefore, 3 directors would constitute the quorum for the Board meetings.<\/p>\n

(b) As per Sec. 174(3) of the Companies Act, 2013 if at any time the number of the interested directors exceeds or is equal to 2\/3rd of the total strength of the Board of Directors, the number of the directors who are non-interested but present at the meeting, not being less than 2 shall constitute the quorum.<\/p>\n

In the present case, there are in all 15 directors and the Board meeting commences with all the 15 directors. During the meeting, an item comes up for discussion in respect of which 13 happen to be “interested\u201d directors. In this case, in spite of the excess of the interested directors being more than 2\/3rd, the prescribed minimum number of non-interested directors constituting the quorum, namely, 2 are present at the meeting and can transact the particular item of business.<\/p>\n

Question 16.
\nA meeting of the Board of \u2018No Holiday Ltd\u2019 was held on a national holiday on account of Ganesh Chaturthi, the day being Sunday. However due to lack of quorum, the proceedings of the meeting could not be held and therefore the Chairman of the meeting decided with the consent of the majority that the Board meeting be adjourned to next week on the same day. Whether the meeting of the Board can be held on a Sunday.
\nAnswer:
\nBoard Meeting to be held on Sunday:<\/p>\n

As per sec. 173 (3) of the Companies Act, 2 013, a meeting of the Board shall be called by giving not less than 7 days\u2019 notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means. It further provides for the board meeting to be held on shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting.<\/p>\n

Therefore, board meeting may be held at any place on any day including a national holiday if agreed by the directors.<\/p>\n

As per Sec. 174(4), when a board meeting is adjourned due to lack of quorum, the adjourned meeting can be held on the same day at the same time and place in the next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday, at the same time and place, unless the Articles provide otherwise.<\/p>\n

Conclusion: Since the section specifies of exclusion of only national holiday, so adjourned meeting can be held on Sunday.<\/p>\n

Question 17.
\nWhat is the procedure to be followed, when a board meeting is adjourned for want of quorum?
\nAnswer:
\nAdjournment of Board Meeting due to want of quorum:
\nSection 174(4) of the Companies Act, 2013 provides that,<\/p>\n