Meeting of BOD and other Meetings (Section 118)

Meetings of the Board of Directors (BOD) and other corporate meetings play a significant role in the governance and smooth functioning of a company. Section 118 of the Companies Act, 2013 lays down provisions for the maintenance and recording of minutes of these meetings, which ensures transparency, accountability, and compliance with corporate regulations.

Board of Directors (BOD) Meetings

1. Purpose of BOD Meetings

Board meetings are critical for decision-making and overseeing the management of the company. They are convened regularly to discuss and review business strategies, financial performance, policy formation, risk management, and other corporate matters. BOD meetings allow directors to deliberate on key issues and provide direction for the company’s operations.

2. Frequency of BOD Meetings

• Statutory Requirements: According to Section 173 of the Companies Act, 2013, a company must hold its first Board meeting within 30 days of incorporation. Thereafter, at least four Board meetings must be held every year, and there should not be more than 120 days between two consecutive meetings.
• Quorum for BOD Meetings: As per Section 174, the quorum for a BOD meeting is one-third of the total number of directors or two directors, whichever is higher.

3. Matters Discussed in BOD Meetings

• Financial Decisions: Approval of financial statements, budgets, and capital investments.
• Corporate Policies: Formulation and approval of internal policies, ethics, and governance frameworks.
• Business Strategies: Review of current business performance and strategic planning for the future.
• Risk Management: Discussion of potential risks and their mitigation strategies.
• Compliance and Legal Matters: Review of legal compliance and corporate governance matters to ensure that the company adheres to the law.

4. Minutes of BOD Meetings

Section 118 mandates that minutes of every Board meeting should be recorded and maintained in accordance with the prescribed rules. The minutes should provide a clear and concise summary of the discussions, decisions, and resolutions passed. These minutes must be signed by the Chairperson of the meeting or the next meeting to ensure accuracy and legality.

Committee Meetings

In addition to regular Board meetings, companies often set up specific committees to handle specialized areas of business. These committees meet independently to discuss matters assigned to them. Common committees are:

• Audit Committee: Responsible for overseeing financial reporting, internal controls, and audits.
• Nomination and Remuneration Committee: Deals with the appointment, performance evaluation, and remuneration of directors and senior management.
• Corporate Social Responsibility (CSR) Committee: Handles the company’s obligations toward CSR activities as per Section 135 of the Companies Act.

General Meetings

1. Annual General Meeting (AGM)

The AGM is a formal meeting of the shareholders held once a year to discuss important issues, review financial statements, approve dividends, and elect directors. The company’s financial performance, strategic direction, and key decisions are shared with shareholders, who have the right to vote on resolutions.

2. Extraordinary General Meeting (EGM)

An EGM is convened when there are urgent matters that require shareholder approval but cannot wait until the next AGM. EGMs address issues such as changes in the Articles of Association, mergers and acquisitions, or any other significant business decisions.

Section 118 – Minutes of Meetings

Section 118 of the Companies Act, 2013 mandates that every company must record minutes of all meetings conducted by the Board of Directors, committees, and shareholders (AGM and EGM). The section outlines various provisions for recording, storing, and maintaining minutes of these meetings.

1. Recording of Minutes

Minutes must be maintained in a written or electronic format (as allowed by the Companies Act), ensuring that all significant proceedings, resolutions, decisions, and votes are clearly documented. The minutes must be entered into the minute book within 30 days of the conclusion of the meeting.

2. Signing of Minutes

The Chairperson of the meeting or the Chairperson of the next meeting must sign the minutes to authenticate them. In the case of general meetings, the minutes must also be signed by the Chairperson and initialed on each page. This ensures that the minutes are considered valid records of the meeting.

3. Inspection of Minutes

Shareholders are entitled to inspect the minutes of general meetings during business hours without any charge. However, minutes of Board meetings are typically confidential and are only made available to directors.

4. Maintenance of Minute Books

The minute books must be maintained at the company’s registered office or another notified location. These records should be preserved for a minimum of eight years from the date of the meeting. The company must maintain separate minute books for Board meetings, general meetings, and committee meetings.

5. Penalties for Non-Compliance

Section 118 also specifies penalties for failure to maintain or sign minutes as per legal requirements. A company or an officer in default may be subject to a fine, ranging from ₹25,000 to ₹1,00,000.