Quorum for Board Meeting

Quorum of Board Meeting means the minimum number of directors required to be present to validly transact any business. Section 287(2) of the Companies Act, 1956 fixed the Quorum for Board Meeting is the actual strength divided by three or two directors, whichever is higher. Vacancies shall be deducted from the total strength to find the actual strength.

Important points

In Board Meeting, the presence of interested directors cannot be counted for the purpose of quorum.(not applicable to a Private Company)

Quorum of Board Meeting should be disinterested Quorum. (not applicable to a Private Company)

If the number of interested directors exceeds or equals to two third of total strength, then the remaining directors present (not less than two) shall be the quorum during such time.

The Quorum is required to be present throughout the meeting.

If a Board Meeting adjourned for want of quorum, such adjourned Board Meeting cannot be held on a public holiday. Otherwise no restriction to hold Board Meeting or adjourned Board Meeting on a public holiday.

Case study

The Board Meeting of a Company had to adjourned for want of Quorum. Can the directors who come to attend the meeting claim the sitting fee?

Sitting fee is given for attending the meeting, it does not related with holding of Board Meeting. So the directors, who come to attend the Board Meeting, which could not take place for want of Quorum, can claim sitting fee.

The Board of Directors of a Company met three times in the year. The fourth quarter meeting was adjourned for want of Quorum. It is not possible to hold any meeting in the fourth quarter. Whether the Company has contravened the provisions of the Companies Act, 1956?

Section 285 of the Companies Act, 1956 provides for four Board Meetings in every year. Thus in the given case, the requirements of Section 285 are not met. However, Section 288(2) gives some relief to this. According to this Section, the provisions of Section 285 shall not  deemed to be contravened, if a validly called Board Meeting could not be held for want of Quorum. Hence, in the present case, provisions of Section 285 are not violated.

Provision for Quorum  for meeting of Board of Directors is not directory, but it is mandatory. Any decision taken by a lesser number than the Quorum is void.

Alma Spinning Company (1880)

Needle industries( India) Limited v. Needle Industries Newey (india) Holding Limited, 1981.

The Quorum for Board Meeting is required at every stage of the meeting and otherwise, the business transacted is void.

Balakrishna v. Balu Subudhi (1949)

The Company can provides for a higher number  for constituting Quorum in its Articles of Association, but not a lower number.

Amrit Kaur Puri v. Kapurthala Flour oil & General Mills Company Private Limited(1984).

Challenging the validity of a meeting due to the absence of Quorum shall be done within reasonable time.

Re. PLymoth Breweries v.Penwill(1967)

No Quorum is specified for committee meetings of the Board, then the whole of the committee must meet

Re. Liverpool House hold Stores Association Limited.