Every company has to conduct a meeting on a regular interval of its board of directors to discuss important policies and issues within the organization. In this article, we are going to understand the insights of the procedure and manner of the board meeting.
The number of board meetings
Every company shall hold the first meeting of the board of directors within 30 days from the date of its incorporation (date of incorporation is started from the date when the company got registered and got the certificate of incorporation). And thereafter the company has to hold a minimum number of 4 meetings of its board of directors in every calendar year. And the meeting should be held in such a manner that the interval between the meetings should not be more than 120 days.
Manner of participation of directors
The board of directors may present in the meeting either in person means directly come in meeting or he can attend through video conferencing or even by other audiovisual means which are capable of recording and recognizing the participation of the directors and recording and storing the proceedings of such meetings along with date and time.
Notice of meeting
When the company wants to call for the meeting of the board of directors then notice in writing has to give to every director at least not less than 7 days. The notice of the meeting shall be sent to his address registered with the company and such notice can be sent by hand delivery or by post or by electronic means.
But a meeting of the board may also be called at shorter notice to do the urgent business means if there is a situation where a company has to discuss some major or very important topic then it may be done by giving a shorter notice. But there is one condition that has to be fulfilled by the company to transact an urgent business through shorter notice is that in such a meeting at least 1 Independent director if any company has shall be present at the meeting.
Meeting in case of One person company, Small company, and Dormant company
A One person company, Small company, and Dormant company shall be deemed to have complied with the requirements of a meeting if the company conduct at least 1 meeting of the board of directors in each half of a calendar year and the gap between the 2 meetings is not less than 90 days.
But in the case of a One person company in which there is only 1 director on its board of directors the requirement of the meeting is not required.
Penalty for failure to give notice
The requirement of giving the notice of the meeting of the board of directors is a very important part, and if you fail to do so then you are liable for the penalty. Every officer of the company whose duty is to give notice and he fails to do so, then he shall be liable to a penalty of Rs.25,000.
So it is necessary to comply with all the conditions mentioned above to conduct a successful meeting of the Board of directors.