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CS Executive · Company Law and Practice · Meetings of Board and its Committees

Meera Digital Pvt Ltd is a small company. Its Board met on 10 January and 15 April in the same financial year, then on 20 August and 25 November. Under section 173(5), which statement is correct?

A small company is deemed to comply with section 173 if it holds at least one Board meeting in each half of a calendar year and the gap between the two meetings is not less than ninety days. It is not exempt from meetings and need not meet the general 120-day gap test.

  1. AIt is deemed to comply only if at least one meeting is held in each half of a calendar year with a gap of not less than ninety days between the two meetingsCorrect
  2. BIt must still hold meetings with gaps of not more than 120 days
  3. CIt is exempt from holding any Board meeting
  4. DIt must hold six meetings a year

Explanation

Section 173(5) deems a One Person Company, small company and dormant company compliant if at least one meeting is held in each half of a calendar year and the gap between the two meetings is not less than ninety days. The 120-day rule is the general one, and these companies are not exempt from meetings altogether.

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