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Quorum - Companies Act, 2013

Quorum

Quorum – Companies Act, 2013

Quorum is the minimum number of directors that is considered to be necessary to conduct a Board meeting. Board meetings cannot be held without the requisite minimum quorum present. However, a Board meeting can have a higher quorum than the minimum requirement. A minimum quorum is one-third of the total strength of directors or 2 directors whichever is higher. A board meeting can take place only if the quorum is present and any decision taken in a Board meeting without the presence of a Quorum would be void. The quorum includes the directors who are participating in the Board meeting through video conferencing or by other audiovisual means.

Quorum – While commencing the Meeting

If the requisite Quorum is not available at the start of a Board meeting, the meeting stands adjourned as provided in the Articles of Association of the company. If the articles are silent, then the meeting automatically stands adjourned to the same day, same time in the upcoming week. If that day happens to be a national holiday, then it will be postponed to the next available date which is not a national holiday.

National Holidays includes Republic Day, Gandhi Jayanthi, Independence day or any other day that has been specified as a public or national holiday by the Central Government.

Quorum – Disinterested Directors

The interested directors are not counted for the purpose of the quorum for a Board Meeting. The quorum of disinterested directors is required for each business transacted at the Board meeting unless the articles provide for a higher quorum. Discussions or meetings would not be convened without the participation of quorum of disinterested directors.

Quorum – Exception

No Board meeting could take place without a quorum. However, due to circumstances beyond the control of the company or directors, the number of directors may be reduced below the minimum quorum. The reason for reduction could be death, registration, removal, automatic vacancy or disqualification of a director. If the number of directors is reduced, the only exception is that a single director can hold a Board Meeting either for increasing the number of directors to fix the minimum amount of quorum or summoning a general meeting for a company.

A single director cannot hold a meeting for any purpose. This provision applies only if the number of directors is reduced to one. If there are only 2 continuing directors on the board, the condition of the quorum is fulfilled and this exception will not be applicable.

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