The Board of Directors is the governing body of a company, and decisions relating to its management are taken collectively in Board Meetings. Section 173 of the Companies Act, 2013 prescribes the requirement, frequency, and manner of holding Board Meetings. These meetings ensure transparency, accountability, and proper governance in corporate decision-making.

Applicability & Legal Framework

• Governed by: Section 173 of Companies Act, 2013 + Companies (Meetings of Board and its Powers) Rules, 2014 + Secretarial Standard on Meetings of Board of Directors (SS-1).
• Applies to: All Companies, except:
  • One Person Company (OPC) with only one director.
  • Small Companies and Dormant Companies (relaxed provisions).

Types of Board Meetings

Board meetings may be classified as:

1. First Board Meeting
   • To be held within 30 days from the date of incorporation of the company.
2. Regular / Routine Board Meetings
   • Held periodically to discuss general matters of management and administration.
3. Emergency Board Meeting
   • Convened at short notice to discuss urgent issues such as compliance deadlines, regulatory notices, etc.
4. Adjourned Board Meeting
   • When a meeting is postponed due to lack of quorum or other reasons, it is adjourned and reconvened.
5. Meetings through Video Conferencing / Other Audio-Visual Means
   • Permissible under law, provided the company follows prescribed rules and records proceedings properly.

Number of Meetings (Frequency & Gap)

• First Meeting: Within 30 days of incorporation.
• Subsequent Meetings:
  • Public Company: Minimum 4 Board Meetings every year.
  • Gap: Not more than 120 days between two consecutive meetings.
• Private Companies / Small Companies / OPC / Dormant Companies:
  • At least 1 Board Meeting in each half of the calendar year, and
  • Minimum gap of 90 days between two meetings.

Business Conducted at Board Meetings

Some important matters that must or may be discussed/approved at a Board meeting:

1. Statutory & Mandatory Items
   • Approval of financial statements, Board’s report, annual accounts.
   • Approval of notice of General Meeting.
   • Borrowing powers of the company.
   • Appointment of directors, key managerial personnel (KMP), auditors, etc.
   • Issue of shares, debentures, or other securities.
   • Making calls on shareholders in respect of money unpaid on shares.
   • Diversification of business.
   • Approving mergers, amalgamations, takeovers.
   • Investing company funds or granting loans.
2. Administrative & Operational Items
   • Approval of budgets and business strategies.
   • Reviewing performance of company and subsidiaries.
   • Considering expansion, diversification, joint ventures.
   • Approving contracts where directors are interested (Section 184/188).
3. Other Business Permissible via Board Resolution
   • Appointment of committees of the Board.
   • Authorising buy-back of securities.
   • Declaration of interim dividend.
   • Opening/closing of bank accounts.
   • Appointment of internal auditors, cost auditors, secretarial auditor.

Other Key Provisions

• Notice:
  • At least 7 days’ notice in writing (by hand, post, or electronic means).
  • Shorter notice allowed in case of urgent business (provided at least one Independent Director is present).
• Quorum:
  • 1/3rd of total strength or 2 directors, whichever is higher.
  • Participation via video conferencing counts towards quorum.
• Penalty for Default:
  • Company: Fine up to ₹25,000.
  • Officer in Default: Fine up to ₹25,000.

Practical Notes & Exceptions

• Video Conferencing is widely accepted now and treated equivalent to physical presence.
• Certain items (e.g., approval of financials, Board’s report, mergers) cannot be dealt with by circular resolution and must be discussed at a duly convened meeting.
• Secretarial Standards (SS-1) must be complied with in terms of notice, agenda, minutes, and record-keeping.
• Startups and small companies get relaxation in number of meetings.

Conclusion

Section 173 ensures that the Board of Directors actively participates in the management of the company by holding meetings at regular intervals. By laying down minimum requirements for the number of meetings, notice, quorum, and business conduct, the Act safeguards transparency, accountability, and timely decision-making in corporate governance.