Sections 173 and 174 of the Companies Act, 2013: Board Meetings and Quorum
Sections 173 and 174 of the Companies Act, 2013 regulate the frequency and notice of meetings of the Board of Directors, participation through video conferencing or other audio visual means, and the minimum quorum required for a valid Board meeting.
Updated: 17 September 2026
- The first Board meeting must ordinarily be held within 30 days of incorporation.
- A company must ordinarily hold at least four Board meetings every year, with not more than 120 days between two consecutive meetings.
- At least seven days' written notice is ordinarily required for a Board meeting, subject to the statutory provision for urgent business at shorter notice.
- Directors may participate in person or through permitted video conferencing or other audio visual means.
- Quorum is ordinarily one-third of the total strength or two directors, whichever is higher.
Section 173 - Meetings of Board
Meaning: Section 173 lays down the principal statutory requirements for convening and holding meetings of the Board of Directors. It deals with the first meeting after incorporation, minimum frequency, maximum interval between meetings, electronic participation, notice, shorter-notice meetings and special rules for specified classes of companies.
First meeting and minimum number of meetings
Under Section 173(1), every company is required to hold its first meeting of the Board of Directors within 30 days from the date of incorporation. Thereafter, the general rule is a minimum of four Board meetings in every year, with no more than 120 days intervening between two consecutive meetings.
The Central Government may, by notification, provide exemptions, modifications or conditions for a class or description of companies.
Participation through video conferencing or other audio visual means
Section 173(2) permits directors to participate either in person or through video conferencing or other audio visual means, subject to the prescribed safeguards for recognising participation and recording and storing the proceedings with date and time.
The detailed procedure is governed by the Companies (Meetings of Board and its Powers) Rules, 2014. An important later development is that Rule 4, which had specified matters that could not be dealt with through video conferencing or other audio visual means, was omitted by the Companies (Meetings of Board and its Powers) Amendment Rules, 2021 with effect from 15 June 2021.
Notice of Board meeting
Section 173(3) requires not less than seven days' notice in writing to every director at the address registered with the company. The notice may be sent by hand delivery, post or electronic means.
A Board meeting may be called at shorter notice to transact urgent business. Where the company has an independent director, the statutory safeguards concerning the presence of an independent director, or subsequent circulation and ratification where applicable, must be observed.
Penalty for failure to give notice
Under Section 173(4), every officer of the company whose duty it is to give notice of the Board meeting and who fails to do so is liable to a penalty of Rs. 25,000.
One Person Company, small company and dormant company
Section 173(5) provides a relaxed meeting requirement for a One Person Company, small company and dormant company. Compliance is deemed sufficient if at least one Board meeting is held in each half of a calendar year and the gap between the two meetings is not less than 90 days.
The special meeting requirement in Section 173(5), and Section 174, do not apply to a One Person Company having only one director on its Board.
Section 174 - Quorum for Meetings of Board
Meaning: "Quorum" is the minimum number of directors whose participation is necessary for the Board to validly transact business. Section 174 determines that minimum and also addresses vacancies, interested directors and adjournment where quorum is absent.
General quorum
Under Section 174(1), the quorum for a meeting of the Board is one-third of the total strength of the Board or two directors, whichever is higher. Participation by video conferencing or other audio visual means is counted for quorum, subject to the Act and applicable rules.
For calculating one-third, a fraction is rounded up as one. "Total strength" does not include directors whose places are vacant.
Board strength falling below quorum
Section 174(2) allows continuing directors to act despite a vacancy. However, where their number falls below the statutory quorum, they may act only to increase the number of directors to the required quorum or to summon a general meeting of the company, and for no other purpose.
Interested directors
Where interested directors constitute or exceed two-thirds of the total strength, Section 174(3) provides that the directors who are not interested and who are present, being not less than two, constitute the quorum for that period. The provision links the expression "interested director" to Section 184(2).
Adjournment for want of quorum
If a Board meeting cannot be held for want of quorum, Section 174(4) provides, unless the articles of the company otherwise provide, for automatic adjournment to the same day, time and place in the next week. If that day is a national holiday, the meeting stands adjourned to the next succeeding day that is not a national holiday, at the same time and place.
Practical compliance table
| Requirement | General rule | Relevant provision |
|---|---|---|
| First Board meeting | Within 30 days of incorporation | Section 173(1) |
| Minimum Board meetings | Four every year, subject to applicable exemptions or special rules | Section 173(1) |
| Maximum interval | Not more than 120 days between consecutive meetings | Section 173(1) |
| Ordinary notice | Not less than seven days in writing | Section 173(3) |
| General quorum | One-third of total strength or two directors, whichever is higher | Section 174(1) |
| Electronic participation | Permitted subject to the Act and applicable rules | Section 173(2), Section 174(1) |
Note: This article is a general guide to Sections 173 and 174. Companies should also check applicable rules, notifications, exemptions, their articles of association and other company-specific requirements before convening a Board meeting.