Understanding the Relaxation of Board Meeting Intervals under Companies Act 2013 Amidst COVID-19: Implications and Compliance Clarifications

ACCORDING TO SECTION 173(1) OF COMPANIES ACT 2013 , EVERY COMPANY IS REQUIRED TO HOLD A MINIMUM NUMBER OF FOUR(4) MEETINGS OF ITS BOARD OF DIRECTORS EVERY YEAR IN SUCH A MANNER THAT NOT MORE THAN ONE HUNDRED AND TWENTY(120) DAYS SHALL INTERVENE BETWEEN TWO CONSECUTIVE MEETINGS OF THE BOARD.

Secretarial Standard -1 also provides that company shall hold at least four Meetings of its Board in each Calendar Year with a maximum interval of one hundred and twenty days between any two consecutive Meetings.

Further Ministry of Corporate Affairs (MCA) vide General circular 11/2020 dated 25/03/2020 in order to support and enable Companies in India to focus on taking necessary measures to address the COVID-19 threat, including the economic disruptions caused by it, have relaxed the mandatory requirement of holding meetings of the Board of the companies within the intervals provided in section 173 of the Companies Act, 2013 (CA13) by a period of 60 days till next two quarters i.e., till 30th September.

Accordingly, as a one time relaxation the gap between two consecutive meetings of the Board may extend to 180 days till the next twoquarters, instead of 120 days as required in the Companies Act,2013.

It can be concluded that if company fails to hold meeting of Directors of Company as per Section 173(1) of the Act meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty(120) days shall intervene between two consecutive meetings of the Board, same will not be considered as Non compliance and does not attract any penal provision as mentioned under the law,

Nor it will defeat the provision of four Board Meetings to be conducted in a CALENDER YEAR.