Skip to content

CMA Final · Corporate and Economic Laws · Board Meetings and Procedures

Meeting of the Board of Aarav Textiles Ltd. is called at shorter notice to transact urgent business. No independent director attends. What is the legal position under section 173(3)?

The decisions must be circulated to all directors and become final only when at least one independent director ratifies them, if the company has any. Shorter-notice meetings need an independent director present; where none attends, this ratification route applies, not member approval.

  1. AThe decisions are void and cannot be ratified
  2. BThe decisions are valid without any further step
  3. CThe decisions must be circulated to all directors and are final only on ratification by at least one independent director, if anyCorrect
  4. DThe decisions are final only if ratified by the members in a general meeting

Explanation

The second proviso to section 173(3) says that if independent directors are absent from a shorter-notice meeting, the decisions must be circulated to all directors and become final only on ratification by at least one independent director, if any. Member ratification is not the prescribed route.

Did you get it right without looking?

One question tells you little. A timed set on Board Meetings and Procedures shows your real accuracy, how long you take and where you lose marks.

Practise Board Meetings and ProceduresFree diagnostic mock

More Board Meetings and Procedures questions