Under the new Companies Act, 2013, the quorum for the meetings of Board of Directors of a company is laid down in Section 174. This section has been brought in force w.e.f. 1 April 2014 [vide Notification No. S.O. 902(E), dated 26-3-2014].
As per sub-section (1) of this section, the quorum for a meeting of the Board of Directors of a company shall be one-third of its total strength or two directors, whichever is higher. It is also laid down that the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum under this sub-section.
Further, it is clarified in the Explanation to this section that while computing the quorum:
(i) any fraction of a number shall be rounded off as one;
(ii) “total strength” shall not include directors whose places are vacant.
Section 174 of the Companies Act, 2013, is reproduced below in full:
“174. Quorum for meetings of Board.—(1) The quorum for a meeting of the Board of Directors of a company shall be one-third of its total strength or two directors, whichever is higher, and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum under this sub-section.
(2) The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company and for no other purpose.
(3) Where at any time the number of interested directors exceeds or is equal to two-thirds of the total strength of the Board of Directors, the number of directors who are not interested directors and present at the meeting, being not less than two, shall be the quorum during such time.
Explanation.—For the purposes of this sub-section, “interested director” means a director within the meaning of sub-section (2) of Section 184.
(4) Where a meeting of the Board could not be held for want of quorum, then, unless the articles of the company otherwise provide, the meeting shall automatically stand adjourned to the same day at the same time and place in the next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday, at the same time and place.
Explanation.—For the purposes of this section,—
(i) any fraction of a number shall be rounded off as one;
(ii) “total strength” shall not include directors whose places are vacant.”
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