Can Consecutive Board Meetings Be Held with a Gap of More Than 120 Days?

The answer is Yes, but with specific conditions.

Under Section 173 of the Companies Act, 2013, companies are required to follow certain guidelines regarding the frequency of Board meetings. However, these guidelines do not necessarily mandate that there must never be a gap of more than 120 days between two consecutive meetings. Let’s break it down for clarity.

Key Requirements of Section 173:

1. First Board Meeting: The first Board meeting must be held within 30 days from the date of the company’s incorporation.
2. Minimum Four Meetings per Year: A company must hold at least four Board meetings in a year.
3. Gap Between Consecutive Meetings: There must not be a gap of more than 120 days between two consecutive Board meetings.

At first glance, it seems that the law dictates a strict rule regarding the gap between any two Board meetings — no more than 120 days. However, this interpretation needs a closer look.

A Closer Look at the Law:

While it is true that Section 173 stipulates a gap of no more than 120 days between consecutive meetings, the law actually specifies that this rule applies only to the minimum four Board meetings required to be held in a year, not necessarily to all the Board meetings scheduled.

This means that the 120-day gap condition must be met for the minimum four Board meetings within the year, but not for every single meeting held. The remaining meetings can have gaps exceeding 120 days, as long as the critical minimum meetings are in compliance.

A Practical Example:

Let’s consider a hypothetical company, ABC Ltd., which holds six Board meetings in a year on the following dates:

1. 30th January 2024
2. 30th June 2024
3. 31st July 2024
4. 31st August 2024
5. 30th September 2024
6. 31st December 2024

In this scenario, the gap between the first two meetings (30th January 2024 and 30th June 2024) exceeds 120 days. However, this does not violate the law. The reason lies in the fact that the law only mandates that the gap between two consecutive meetings within the four mandatory meetings must not exceed 120 days.

In ABC Ltd.’s case, the critical four meetings — 30th June 2024, 31st July 2024, 31st August 2024, and 30th September 2024 — are all within the required 120-day gap from one another, ensuring compliance with Section 173.

Conclusion:

To sum up, while the Companies Act does impose a rule on the maximum gap between two consecutive Board meetings, this applies only to the minimum required four meetings in a year. As long as the gap between the four mandatory meetings does not exceed 120 days, a company can legally hold Board meetings with gaps of more than 120 days between other meetings.

Disclaimer: The contents of this document are based on the current provisions of the Companies Act, 2013, and the information available at the time of writing. Every effort has been made to ensure accuracy and reliability. However, no responsibility is assumed for any errors or omissions. Users are encouraged to consult applicable laws and regulations for detailed guidance. This information does not constitute legal advice, and no liability is accepted for any consequences arising from its use.

From the desk of CS Sharath