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

Orbit Foods Ltd, a listed company, calls a Board meeting at two days' notice to approve an urgent contract. No independent director attends. Which statement is correct under section 173(3) provisos?

Decisions taken at the short-notice meeting must be circulated to all directors and become final only when at least one independent director ratifies them. Absence of independent directors does not void the meeting, but it makes ratification a condition for finality.

  1. AThe meeting is invalid and no decision can ever be valid
  2. BThe decisions are final immediately because the notice was shorter only by reason of urgency
  3. CThe decisions must be circulated to all directors and become final only on ratification by at least one independent director, if anyCorrect
  4. DThe decisions become final once the Registrar is informed within thirty days

Explanation

Shorter notice is allowed for urgent business, but at least one independent director, if any, must be present. If none attends, the decisions must be circulated to all directors and are final only on ratification by at least one independent director. Option 2 ignores this condition.

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