Question
Consider the following statements regarding the quorum for Board meetings under Section 174 of the Companies Act, 2013: Statement 1: The quorum for a Board meeting is one-third of the total number of directors or 2 directors, whichever is higher. Statement 2: Directors participating through video conferencing or other audio-visual means are counted toward the quorum. Statement 3: If the number of interested directors exceeds two-thirds of the total board strength, only non-interested directors need not attend for quorum. Statement 4: If quorum is not present, the continuing directors can proceed with appointing new directors to meet quorum requirement. Which statements are correct?
Solution
Section 174 of the Companies Act, 2013 prescribes board quorum. Statement 1 is correct—this is the standard quorum requirement. Statement 2 is correct—Section 174(1) explicitly states that participation through audio-visual means counts for quorum. Statement 4 is correct—Section 174(2) provides that continuing directors can act to appoint additional directors when quorum is not met. Statement 3 is incorrect because Section 174(3) states that when interested directors exceed two-thirds, the non-interested directors present (not less than two) form the quorum; interested directors must recuse themselves and not participate. Statements 1, 2, and 4 are correct.
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