The Board Meeting is a formal meeting of the top executives or directors of the company called to debate certain issues and problems and to make decisions. The meetings are to be held at definite times, at definite places.
Board Meetings require more planning and detailed preparation than the usual corporate events as such meetings are attended by the top corporate executives and leaders of the company. It must be distinguished from a general meeting, which is a meeting of the members (shareholders) of a company.
Number or Board Meetings
As per Section 173 (1) of the Companies Act, 2013, a newly incorporated Company must hold its first Board Meeting within a period of 30 days from incorporation.
Thereafter, a company is required to hold at least 4 Board Meetings in each financial year and ensure that the gap between two meetings does not exceed 120 days.
The quorum should be one-third of the directors or two directors, whichever is higher. Moreover, the participation of the directors by video conferencing or by other audio/visual means shall also be counted for the purposes of quorum.
Notice for Board Meeting
As per Companies Act Section 173 (4) a notice of at least seven days must be given in writing to every director at his/ her address registered with the company. Such notice shall be sent by hand delivery or by post or by electronic means.
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. In case of absence of independent directors from such a meeting, decisions taken at the meeting shall be circulated to all the directors and shall be final only on ratification by at least one independent director if any.
Board Meeting Minutes
Minutes of a Board Meeting is a formal written record, in physical or electronic form. In short, board meeting minutes contain a summary of the matters discussed and decisions taken at such meeting. All companies registered in India, except OPC and Section 8 Company, are required to maintain minutes,
The minutes shall be maintained as per the manner prescribed in Section 118 of the Companies Act, 2013 and Secretarial Standard on Meetings of Board of Directors issued by the Institute of Company Secretaries of India (ICSI)
Maintain a separate minutes book for each type of meeting. For instance, minutes book of Board Meetings, minutes book of General Meetings, etc.
Preserve the minutes permanently in the custody of the company secretary or any director duly authorized by the Board.
Board Meeting can be kept at the registered office or any other place as the Board may decide.
Content of the Minutes of Board Meeting
The Minutes shall contain:
- Name of the company, serial number and type of meeting, date, day, venue and time of commencement of the meeting
- Names of Directors present, whether physically or electronically, Company Secretary and invitees if any. In case the director is participating electronically, the location of such director
- Record of the election of Chairman
- Quorum of the meeting
- It shall contain a record of all appointments made at the meeting
- Directors who sought and were granted leave of absence
- Noting of the previous meeting minutes
- Noting of the minutes of committee meetings, if any
- Resolutions passed by way of circulation, if any, including dissent or abstention
- The fact that an interested director did not participate or vote in the matter he/she was interested in
- The views of the Directors particularly the Independent Director, if specifically insisted upon by such Directors
- If any Director has not participated in any Agenda items
- The fact of the dissent and the name of the Director who dissented from the Resolution or abstained from voting
- Ratification by Independent Director or a majority of Directors, in case of Meetings held at a shorter Notice
- Consideration of any other item than those included in Agenda
- The time of commencement and conclusion of the Meeting
Recording of Minutes Board Meeting
- Minutes shall contain a fair and correct summary of the proceedings of the Meeting.
- Write minutes in clear, concise and plain language
- Give a reference to any modified or superseded resolutions or decisions.
- Minutes of the preceding meeting shall be noted at the Board Meeting held immediately following the date of entry of such Minutes in the Minutes Book
Finalization of Minutes of Board Meeting
Circulate the draft within 15 days of the conclusion of the meeting for comments of the Directors.
Minutes can be circulated by hand, speed post, registered post, courier, e-mail, or by any other recognised electronic form.
Entry in Minutes Book
- Enter the minutes in the Minutes Book within 30 days from the conclusion of a meeting.
- A Company Secretary or a person authorised by the Board shall enter the date of minutes.
- Minutes shall not be altered except with the express approval of the Board.
Signing of Minutes of Board Meeting
The Chairman of the meeting or of the succeeding meeting shall initial each page of minutes book and sign and date the last page.
Moreover, the Chairman shall initial each page and sign and append date and place on the last page of the minutes.
Within 15 days of signing, minutes shall be circulated to all the Directors.
Points to remember
- Consecutively number the pages of the Minutes Books shall.
- Moreover, minutes shall not be pasted or attached to the Minutes Book or tampered with.
- Minutes shall be written in third person and past tense. Whereas, the resolutions shall be written in the present tense.
Some items for which a Board Meeting is required to be held are:
What are the prerequisites for the board meeting?
The following are the prerequisites for a Board Meeting:
– The notice of the meeting shall provide all the necessary details of the meeting. Including the option available through video conferencing mode and other details that enable the directors to participate through video conferencing.
– If a director wishes to participate via video conferencing, then he/she should inform before-hand to the Chairperson or the Company Secretary of the company. This is done so that the company can make suitable arrangements for the same.
What is the frequency of the Board Meeting?
First board meeting: Every company is required to conduct its first board meeting within 30 days of incorporation
Subsequent board meetings: After this, the company is required to conduct at least 4 board meetings within 1 year. The time period between each meeting should not be less than 120 days.
What is the quorum of the Board Meeting?
1. In case the meeting is not held due to quorum (minimum number of members), then the meeting shall be held on the same date, same time, same place next week (not being a national holiday).
2. But if the number of directors is below quorum, then the remaining directors may hold the meeting for purposes given below:
a. To call a general meeting
b. To increase the number of directors
c. Or if the interested director exceeds or equals to 2/3rd of the remaining directors, then at least 2 should be the quorum