Now, Board of Directors meetings through Video Conferencing counted for Quorum

Legal Experts at NovoJuris shed some light on this

After almost 13 years of constant request by the industry, Ministry of Corporate Affairs (MCA) considers Directors attending Board / Committee Meetings through video conferencing as valid quorum. Read the circular here http://goo.gl/HhI1f. I remember program co-ordinating Companies Bill, 1997 held by Institute of Company Secretaries of India.

Highlights:

• Electronic mode means video-conference facility.
• Notice for the Meeting to clearly provide details of the video-conference facility and how to participate.
• Director to confirm specifically on their mode of participation – physical or electronic mode.
• A roll call would be made before the commencement, re-commencement and conclusion of the meeting to ensure presence of quorum through out the meeting.
• Voting: Chairman / Secretary should call the roll and note the vote of each director who should identify herself.
• Chairman at the end of the meeting shall announce the summary of decisions taken in that meeting and names of directors who have consented/ dissented.
• Adequate security measures to be taken to ensure proper video conference facilities, that only authorized persons to participate and the like.

But there is a surprise. The Circular requires that every director must attend a Board / Committee meeting ‘personally’ at least once in the financial year. This goes against the current Companies Act requirement that a director can take leave of absence and there is no mandatory requirement of having to be present for one meeting.

MCA also has provided for participation of shareholders through video-conferencing. But it is only ‘participation’ and it would not be counted as ‘quorum’. Quorum for shareholder meeting would still be 2 shareholders physically present in a private limited company and 5 in a public limited company. You can find the Circular here http://goo.gl/STn9s.

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