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    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?
    A Statements 1, 2, and 4 only Correct Answer Incorrect Answer
    B Statements 1 and 2 only Correct Answer Incorrect Answer
    C Statements 2, 3, and 4 only Correct Answer Incorrect Answer
    D Statements 1, 2, 3, and 4 only Correct Answer Incorrect Answer
    E Statements 1 and 4 only Correct Answer Incorrect Answer

    Solution

    Section 174 of the Companies Act, 2013 prescribes board quorum. Statement 1 is correctтАФthis is the standard quorum requirement. Statement 2 is correctтАФSection 174(1) explicitly states that participation through audio-visual means counts for quorum. Statement 4 is correctтАФSection 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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