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CA Intermediate · Corporate and Other Laws · Management & Administration

Dhanush Ltd's board of directors has six directors. A board meeting is called on 7 days' notice, and four directors attend, but one of them participates through video conferencing. The articles do not prescribe a different quorum. Which statement is correct?

Quorum for a board meeting is one-third of total strength or two directors, whichever is higher. For six directors that is two, and directors on video conferencing count, so four attendees satisfy the quorum and the meeting is validly constituted.

  1. AQuorum is one-third of total strength or two directors, whichever is higher, and a director attending by video conferencing is counted, so the quorum is metCorrect
  2. BQuorum is not met because a director attending by video conferencing cannot be counted
  3. CQuorum is half of total strength, so four directors are exactly needed and this meeting fails
  4. DQuorum is two-thirds, so five directors are required

Explanation

Quorum for a board meeting is one-third of total strength or two directors, whichever is higher; one-third of six is 2, so quorum is 2. Directors participating via video conferencing or other audio-visual means are counted for quorum. Four attending easily satisfies it. The notice is also at least seven days, which is valid.

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