COMPANY LAW UPDATE – BOARD MEETINGS BY VC: REQUIREMENT OF PHYSICAL PRESENCE OF QUORUM REMOVED – Eshwars
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COMPANY LAW UPDATE – BOARD MEETINGS BY VC: REQUIREMENT OF PHYSICAL PRESENCE OF QUORUM REMOVED

Authored by Adit N Bhuva

Background:

Companies Act permits the Board and committee of the Board to conduct their meetings through Video Conference (“VC”) subject to compliance with the procedures prescribed thereunder.

However, currently, there are certain matters, which requires the presence of a quorum of the board/committee at one place viz:

1. approval of the annual financial statements;

2. approval of the board’s report;

3. approval of the prospectus;

4. audit committee meetings for consideration of financial statements including consolidated financial statements, if any, to be approved by the board.

5. approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

Due to Covid-19 Pandemic, to enable social distancing and still at the same time ensure the continuation of the business, the Ministry of Corporate Affairs (MCA) had vide various notifications waived the requirement of the physical presence of directors in the board meeting, in respect of matters which required the quorum (minimum number of directors to constitute a valid meeting) to be present in one place. This relaxation was available till 30th June 2021.

Amendment:

Now the MCA vide its notification dated 15th June 2021, has altogether removed the requirement of a quorum to be present in one place.

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