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Board Meeting by Video Conference

May 1, 2020     by Kavita Agrawal

Every company (except small and one-person company) is required to hold a minimum number of four meetings of its Board of Directors every year in such a manner that the maximum interval between any two consecutive meetings should not be more than 120 days. However, it may not always be possible for all the directors to meet at a particular venue for holding the meeting. To address this, the Companies Act, 2013 (“the Act”) has made provisions for allowing a director to attend the meeting through video conferencing or other audio visual means.

Section 173 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014, provides the following-

  • The participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio visual means.
  • The notice of the meeting shall inform the directors regarding the option available to them to participate through video conferencing mode or other audio visual means and shall provide all the necessary information to enable the directors to participate through such means.
  • Directors participating through video conferencing shall also be counted for the purpose of quorum.
  • The system should be capable of recording and storing the proceedings of such meetings along with date and time.
  • The Chairperson/Company Secretary shall take care for safekeeping of electronic recording (as part of the records of the company) during the particular year and shall be further maintained for subsequent eight years.
  • Matters not to be dealt in a meeting through video conferencing (i.e. restricted matters):
    • ✔ Approval of annual financial statements.
    • ✔ Approval of the Director’s report.
    • ✔ Approval of the prospectus.
    • ✔ Audit committee meetings for consideration of accounts.
    • ✔ Approval of matters relating to amalgamation, mergers, demergers, acquisitions and takeovers.

However, in cases where quorum is present through physical presence of directors in a meeting, any other director can participate through video conferencing or other audio visual means in such meeting on any matter specified above.

Relief provided in the wake of Covid-19 outbreak

The Government of India has been making tremendous efforts in all the fields for enabling the people to maintain social distancing in order to fight coronavirus. With the same objective, the Ministry of Corporate Affairs (vide notification dated 19th March, 2020) has allowed the companies to even take up the restricted matters (as mentioned above) in a meeting held through video conferencing or other audio visual means wherein attending Directors are present through these modes only. This relief shall be valid for Board Meetings to be held till 30th June, 2020.

Such relief will definitely help the companies in ensuring that they follow social distancing norms without contravening any of the provisions of the Act and carry on their business without any procedural challenges.

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