Introduction

Quorum refers to the minimum number of members required to constitute a valid meeting. A quorum is a specific number or proportion of members that must be present for a meeting to proceed legally. In case if required quorum is not present, meeting cannot proceed and decisions taken in meeting will be considered as invalid. The Companies Act, 2013 provides that a company established under the Act must hold General meetings as well as Board meetings time to time and such meeting to be valid, there must be quorum as per the provisions of the Act. The Acts provides the minimum numbers of members required to be present to form a valid quorum for General meetings as well as Board meetings as mentioned in section 103 for ‘General Meeting’ and section 174 for Board Meeting’.

Section 103 Quorum for General Meeting

Section 103 specify the minimum number of members to be present to form a valid Quorum. Section also specify that, if article of association provides for more number of members required, quorum will be according to article of association. Section 103 provides the minimum number of members to be present for public company, private company and also for adjourned meeting.

For Public Company

Physical presence of minimum five members if the total number of members as on the date of meeting is not more than one thousand;  if the number of members as on the date of meeting is more than one thousand but up to five thousand, minimum fifteen members required. And if the number of members as on the date of the meeting exceeds five thousand,  minimum thirty members must be present personally.

For Private Company 

In the case of a Private Company, two members personally present, shall be the quorum for a meeting of the company.

For adjourned meeting

The meeting shall stand adjourned to the same day in the next week at the same time and place, or to such other date and such other time and place as the Board may determine; or the meeting, if called by requisitionists under section 100 (regarding calling of extraordinary general meeting), shall stand cancelled.

Provided that in case of an adjourned meeting or of a change of day, time or place of meeting, the company shall give not less than three days notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated.

If at the adjourned meeting also, a quorum is not present within half-an-hour from the time appointed for holding meeting, the members present shall be the quorum.

Section 174 Quorum required for meetings of Board.

The quorum for a meeting of the Board of Directors of a company shall be one third of its total strength or two directors, whichever is higher, and the participation of the directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum.

If in case the quorum is not present, directors have two choice. One either they must try to increase the number of directors as required by section 174 or they must summon(call) a general meeting.

If the board of meeting could not be held for want of quorum, the board meeting should be adjourned to the same day at the same time and place in the next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday, at the same time and place.

Explanation to the section states that, For the purposes of this section, any fraction of a number shall be rounded off as one and “total strength” shall not include directors whose places are vacant.

In certain cases even person is present, meeting can be constituted. Like meeting called by registrar, meeting called pursuant to the court order and if the meeting is adjourned meeting, and article provides that the member present would be the quorum.

Conclusion

Qurom is very important for conducting meetings as per the provisions of section 103 and section 174 of The Companies Act, 2013. Companies are allowed to decide higher quorum as compared to Act but it must be mentioned in article of association and there should be adherence to this higher quorum. In certain exceptional cases, even smaller number of quorum is also allowed.