MEETING OF

BOARD
AS PER COMPANIES ACT, 2013
 Board of Directors
● Principal organ of a company.

● Responsible for carrying out the management of affairs of

company.

● Subject to two limitations:

a)Not to take decisions which are under regime of shareholders; and

b)Every decision of board should be in accordance with law, MOA

and AOA of the Company.
 Board meetings

BoD act through meetings .

● Generally the BoD take their decisions at meetings;

● However, they can take their decisions even without meeting

except for certain matters which are specifically to be taken only
at a board meeting

● BoD can take decisions by circular resolutions also.

Secretarial Standard 1-
Board Meetings
 SS1 –Board meetings- Main
features
● The notice of BM to clearly specify- Day, Date, Time,
venue and serial number of the meeting
● Notice should inform directors if facility of participation
through electronic mode is made available and if yes, the
modus operandi
● Notice of meeting, Agenda and notes on agenda to be given at
least 7 days before (unless articles provide for a
longer period)
● Quorum to be present throughout the meeting
● Minutes to specifically provide time of commencement
and end of meeting.
 SS1 –Board meetings- Main
features (contd..)
● Draft minutes of the meeting to be circulated to all
directors within 15 days of the meeting
● Minutes to be entered in minutes book in 30 days of the
meeting
● Each page of minutes book to be initialled and last page to be
signed by chairman along with date
● Date of entering the minutes should be mentioned by a
director or secretary
● Minutes not to be pasted or attached to the minutes book.
 Meetings of the Board (Sec:173)
● First Meeting within 30 days from incorporation.

● Minimum 4 meetings in a year with a gap of not more than 120

days between the two meeting .

● Participation of Directors may be either in person, through

video conferencing or through audio visual means.

● An OPC, Small Company and Dormant Company shall

hold at least one Board Meeting in each half of calendar year
such that gap between two meeting is not less than 90 days.
 Notice of the Meeting
● At least 7 days notice is required for calling Board Meeting.

● Notice of meeting is to be given to every director at his address

registered with company.
● Notice can be sent by hand delivery, post or electronic
means (i.e. email or fax) .
● Shorter notice is valid only if matter is urgent and at least one
Independent Director is present at the meeting.
● In the absence of Independent Director, decisions taken at such
meeting shall be circulated to all the directors and shall be final
only on ratification by at least one Independent Director.
Board Meeting through video
conferencing
Matters not to be dealt in a meeting through video
conferencing :-

● Approval of annual financial statements;

● Approval of Board’s Report;
● Approval of prospectus;
● Audit Committee Meetings for consideration of financial statement;
● Approval of matters relating to amalgamation, merger, demerger
acquisition and takeover.
 Quorum of the Board Meeting
(Sec: 174)
● 1/3rd of total strength or 2 directors whichever is higher.
(Participation of directors through video conferencing or other
audio visual means shall also be counted for the purpose of
quorum.
● If number of Interested Directors is 2/3rd or more of total
directors than, the other directors not less than 2 shall be the
quorum for that time.
● For this section fraction shall be rounded off as one.

● If the Board meeting could not be held for want of quorum,

then the meeting shall automatically adjourned to the same
day same time same place, next week.
Passing of Resolution by
Circulation (Sec: 175)
● A draft resolution shall be circulated to all the directors
at their registered address for seeking their approval, by
hand delivery/ post/ courier/ electronic means i.e. by Email
or Fax.
+
Approval by majority

● Where 1/3rd or more directors require the said resolution to

be decided at the meeting, the Chairman shall put the same
to be decided at the meeting.
Committees of the Board
(Sec :177 & 178)
● Following are the mandatory Committee that are to be
constituted by the Companies given below:
1. Audit Committee (sec 177)
2. Nomination and Remuneration Committee (sec 178)
3. Stakeholders Relationship Committee (if number of
shareholders, debenture holders or deposit holders are
more than 1000) (sec 178)
Following Companies to have Audit Committee, Nomination and
Remuneration Committee:-

•Every Listed Company;

•All Public Companies with a Paid up capital of Rs. 10 crores

or more;

• All Public Companies with Turnover of Rs. 100 crores or more;

•All Public Companies having Outstanding dues (loans +

borrowings+ deposits +debentures) exceeding Rs.50 crores or
more.

(Note: All this figures shall be taken as existing on the date of last
audited financial statements)
• The Audit Committee shall consists of minimum of 3
directors with majority of Independent Directors.

• The Chairman of the Audit Committee shall be Independent

Director.

• Nomination and Remuneration Committee shall consists three

or more non – executive directors with not less than one half of
members of the Committee shall be Independent Directors
 Stakeholder Relationship
Committee
● The Board of a company which consist of more than 1,000
shareholders, debenture holders, and deposit holders or any
other security holder any time during the financial year shall
constitute a stakeholder relationship committee with a
chairperson to be non-executive director and such other
members as may be decided by the Board of directors.

● Non consideration of resolution of any grievance in good faith

shall not constitute contravention of this Section.
 Establishment of Vigil Mechanism

● Companies belonging to following class shall establish a vigil

mechanism for their directors and employees to report their
genuine concerns in the prescribed manner :-
1. All listed Companies
2. Companies which accepted deposits from the public
3. Companies which have borrowed money from banks and public
financial institutions in excess of Rs. 50 Crores.
Powers of Board (Sec:179)
● The Board of Directors of a Company shall be entitled to exercise all
the powers and to do all the acts, as the Company is authorised to
exercise.
● The Board of Directors shall exercise the following powers at
Board meeting on behalf of Company:
1. To make calls on shares
2. To authorise buy back of securities
3. To issue securities including debentures
4. To borrow money
5. To invest funds of the Company
6. To grant loans or give guarantee or provide security in respect of loans
7. Toapprove financial statement and Board’s Report
8. To diversify the business of the company
9. To approve amalgamation, merger or re-construction
10.To take over a company or acquire a controlling or substantial
stake in any company.
Rule 8 of the Companies (Meetings and Powers of Board) Rules,
2014 provides for additional powers which shall also be
exercised by the Board only at the Board Meeting. :

- Totake note of appointment or removal of KMP;

- To appoint internal auditor and secretarial auditor;
- To make Political Contributions
Restrictions on powers of Board
(Sec:180)
● Applies to all Companies (Other than PRIVATE companies)
● Special resolution would be required to be passed to exercise
specified powers i.e.
1. To sell lease or otherwise dispose of the whole or substantially
the whole of the undertaking,
2. To invest otherwise in trust securities,
3. To borrow money,
4. To remit or to give time for the repayment of any debt due from
any director
● Section 180 also defines the expression “ undertaking” and
“substantially the whole undertaking” using 20% threshold
criteria.
● Section 180(1)(b) covers the power to invest the amount of
compensation received as a result of any merger or amalgamation
i.e. if such investment is made u/s20 of Indian Trust Act.
Company to contribute to
bonafide and charitable funds, etc.
(Sec:181)
● Power of Board :- Contribution upto maximum 5% of its
average net profits during 3 immediately preceding financial
year.
● Donations to charitable and other funds directly relating to the
business of the Company or the welfare of its employees not so
excluded from the ambit of Section 181 of the 2013Act.
● Prior permission of the members of the Company in general
meeting is required in case amount of expenditure exceeds the
limit of 5% as specified.
Prohibitions and restrictions
regarding political contributions
(Sec:182)
● A Non Govt. Company and a Company which is in existence for at
least 3 financial years can make political contributions up to 7.5%
of average net profits for three preceding financial years.

● No such contribution shall be made unless resolution has been

passed in the Board of Directors meeting for such
contribution.

● Company shall disclose name of the political party and amount of

contribution in its P/L account.
Power of Board and other persons
to make contributions to national
defence fund, etc. (Sec: 183)

● Notwithstanding Section 180,181 & 182 and the Act, the Board or
any person so authorized to act on behalf of Board or the
company in General Meeting may contribute any amount to
National Defence Fund or any other fund as approved by Central
Government.

● Company shall disclose amount so contributed in P/L account.

Disclosure of interest by director.
(Sec: 184)
Loan to directors, etc. (Sec:185)
● Under Section185 there is total prohibition on making
of loans to Directors or giving guarantee/providing
security in connection with loan taken by director or
company and specified parties.
● This sub-section shall not apply to:-
a. Loan to MD orWTD:
- as a part of service provided to all employees;
- under any scheme approved by a special resolution;
b. By a Company in ordinary course of business where the
interest charged is not less than that fixed by RBI.
c. Loan/Guarantee/Security provided by a holding Company
to itsWOS.
d. Providing of Guarantee/Security by a Holding Company
for a loan provided by a Bank to itsWOS.
(Provided such loan is utilised by the subsidiary for its principal
business activities)
Loan and investment by company.
(Sec: 186)
● A Company unless otherwise prescribed, shall not make
investment through more than two layers of investment
companies.
● This section shall not affect:-
- A company acquiring a foreign Company with more than two
layers of investment subsidiaries;
- A subsidiary company from having an investment subsidiary as
required under any law/rule/regulation.
● Approval by special resolution is required where the
loan/guarantee/security exceed 60% of its paid up
capital, free reserves and securities premium account
or 100% of its free reserves.
● Where a loan/guarantee/security has been provided by a
Company to its WOS, JV or acquisition is made by a Holding
Company of shares of WOS no special resolution is required
even if it exceeds the limit under Section 186(2).
● The company shall disclose in its financial statement the
amount of loan/guarantee/security and the purpose for
which it was provided.
● No investment/loan/guarantee/security shall be made
unless a Board Resolution is passed with the consent of
all the director present.
● Approval by special resolution is required where the
loan/guarantee/security exceed the limit given under
Section 186(2).
● Every Company giving loan/guarantee/security or making
acquisition shall maintain a register in Form“MBP-2”.
Related party transactions
(Sec :188)
● No Company shall enter into any contract/arrangement with
related party without the consent of Board regarding:-
- Sale, purchase, supply of goods/materials;
- Selling/disposing/buying of any property;
- Leasing of any property;
- Availing/rendering any service;
- Appointing any agent for
purchase/sale of
goods/materials/services/property;
- Appointment of related party to any office or place of profit
in the Company/its subsidiary/its associate and
- Underwriting subscription of securities/derivatives of the
Company.
● The agenda of the Board meeting at which
such resolution is proposed shall disclose:-
- The name of the related party and nature of
relationship;
- The nature, duration of the contract and particulars of
the contract or arrangement;
- The material terms of the contract or arrangement
including the value if any;
- Any advance paid or received from the contract or
arrangement;
- The manner of determining the pricing and other
commercial terms;
- Whether all factors relevant to the contract have been
considered;
- Any other relevant information.
CONCLUSION
THANK YOU