Quorum requirements for Board Meeting and General Meeting are crucial aspects of corporate governance under the Companies Act, 2013, and Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI). These standards help ensure that decision-making processes within a company are conducted with due diligence and the necessary participation. Let’s explore the quorum requirements as per both sources:
Quorum for Board Meetings (Companies Act, 2013):
Minimum Number of Directors:
As per Section 173 of the Companies Act, 2013, a quorum for a Board Meeting consists of one-third of the total strength of directors or two directors, whichever is higher.
In the case of a One Person Company (OPC), the quorum is one director.
Interested Directors Not Counted:
Interested directors (those who have a direct or indirect interest in a matter being discussed) are not counted towards the quorum.
Video Conferencing:
Directors can participate in Board Meetings through video conferencing or other audio-visual means, which counts towards quorum, subject to specific conditions outlined in the Act.
Quorum for General Meetings (Companies Act, 2013):
Annual General Meeting (AGM):
For an AGM, the quorum consists of:
Five members personally present if the number of members is up to 1,000.
Fifteen members personally present if the number of members is more than 1,000 but up to 5,000.
Thirty members personally present if the number of members exceeds 5,000.
Extraordinary General Meeting (EGM):
For an EGM, the quorum is as per the Articles of Association of the company, but it cannot be less than two members personally present.
Proxy:
A member can appoint another member as a proxy to attend and vote at a meeting on their behalf. However, the appointment of a proxy does not count towards quorum.
Quorum as per Secretarial Standards (SS-1 and SS-2):
Board Meetings (SS-1):
As per Secretarial Standard-1, the quorum for Board Meeting should be as per the provisions of the Companies Act, 2013. It emphasizes the importance of adhering to statutory requirements.
General Meetings (SS-2):
Secretarial Standard-2 provides detailed guidance on quorum requirements for General Meetings, ensuring compliance with the Companies Act, 2013. It also addresses issues related to proxies and their counting towards quorum.
Reconciliation:
The Secretarial Standards aim to reconcile any discrepancies between the Articles of Association and the Companies Act, 2013, regarding quorum, by emphasizing the need to follow the stricter requirement.
Compliance with quorum requirements is vital for the validity of decisions taken in both Board and General Meetings. Companies must maintain accurate records of quorum for these meetings and ensure that all meetings, whether physical or through electronic means, are conducted in accordance with the applicable laws and standards. Violation of quorum requirements can render decisions taken at such meetings invalid, potentially leading to legal consequences.
Disclaimer:
The information provided in this content is for general informational purposes only. You should always seek the advice of an expert before making any decisions based on the information provided. We do not warrant or guarantee the accuracy, completeness, or usefulness of the information provided. Any reliance you place on such information is strictly at your own risk. We are not responsible for any damages, losses, or expenses related to the use of this content.
07 December 2023 
