Section 173 of CA 2013 : Section 173: Meetings Of Board

Explanation using Example

Imagine a scenario where "Tech Innovations Pvt. Ltd." was incorporated on January 1, 2023. According to Section 173(1) of the Companies Act, 2013, the company must hold its first Board of Directors meeting by January 31, 2023. Additionally, throughout the year, the company must ensure that it holds at least four Board meetings, with not more than 120 days between two consecutive meetings.

For the second meeting, the directors decide to use video conferencing due to travel restrictions. This is permissible under Section 173(2), provided the technology used can record the proceedings and the participation of the directors, along with the date and time.

Before each meeting, the company's secretary is responsible for sending out a written notice at least seven days in advance to each director's registered address, as stated in Section 173(3). However, in March, an urgent situation arises requiring a quick Board decision. The company calls a meeting at shorter notice, ensuring that at least one independent director is present, in compliance with the same subsection.

If the company's secretary fails to send out notices for any Board meeting, they would face a penalty of twenty-five thousand rupees, as per Section 173(4).

However, if "Tech Innovations Pvt. Ltd." were a small company, it could have fewer meetings—just one in each half of the year with a gap of at least ninety days between them, as mentioned in Section 173(5)—unless it's a One Person Company with only one director, in which case this requirement would not apply.