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CA Intermediate · Corporate and Other Laws · Management & Administration

Meridian Pharma Ltd, a listed company, held its Board meeting on a day when only 2 of its 9 directors were physically present; the rest attended through video conferencing. The company secretary says the quorum is not met. The quorum for a Board meeting is one-third of total strength or two directors, whichever is higher. What is the correct position?

Quorum is three directors, being one-third of nine, which exceeds two. Directors attending by video conferencing count towards quorum, so with all nine participating the quorum is satisfied and the meeting is valid despite only two being physically present.

  1. AQuorum is 3 directors, and directors participating by video conferencing are counted towards itCorrect
  2. BQuorum is 2 directors, so the meeting is valid even if no one else attends by video
  3. CQuorum is 3 directors, and only physically present directors count, so quorum is not met
  4. DQuorum is 5 directors, being a majority of 9

Explanation

One-third of 9 is 3, which is higher than 2, so quorum is 3. Directors attending through video conferencing or other audio-visual means are counted for quorum. With 2 physical plus 7 by video, 9 are present, so quorum is met. The company secretary wrongly counts only physical attendance.

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