A Company is an artificial judicial person created by law. A Company is considered a separate legal entity and is capable of buying property in its own name or entering into contract. Being an artificial judicial person, Company is governed by its Board of Directors. The Board of Directors of the Company acts as agents of the Company. It is important for the Board of Directors of the Company to meet at the regular intervals in order to ensure smooth functioning of the Company. In this article we will give the basic understanding of Board Meetings and terms used regarding it.
Frequency of Board Meetings
The minimum number of Board Meetings during the year should not be less than four. The Board of Directors must meet minimum once in every three months. Maximum gap between two Board Meetings cannot be more than 120 days.
Notice of Board Meeting
A Board Meeting can be called by giving minimum 7 days notice to the Board of Directors. The notice can be served through Hand Delivery, Post or by Electronic means. Meeting of Board of Directors can be called by giving shorter notice also subject to certain conditions.
First Board Meeting of the Company
After incorporation of Company, the first Board Meeting of the Company should be held within 30 days from the date of incorporation of the Company.
Quorum of Meeting
Quorum means presence of minimum number of Directors required at the Board Meeting to validly transact the business. The Quorum for a Board Meeting is one third of total number of Directors or two directors whichever is more.
If meeting of Board of Directors cannot be held for want of Quorum, the meeting shall automatically adjourn to same time, same place in the next week (not being national holiday).
Passing of resolution by circulation
A resolution can also be passed without holding a Board Meeting. A Company may do so by passing resolution by circulation. Company can circulate the draft resolution with necessary documents to all the directors by hand delivery, post or electronic means. If majority of the directors approve the draft, the resolution is considered to be passed. Resolution passed through circulation should be noted at subsequent Board Meeting. If before passing the resolution by circular, one third of the directors requests the Chairman to decide the matter in the meeting, such resolution shall be passed at the Board Meeting.
You may refer to the below mentioned links to know more about
Annual General Meeting of Company
Extraordinary General Meeting of Company