Chapter XII - Meetings of Board and Its Powers
Section 173
Section 173: meetings of Board
A company must hold its first Board meeting within thirty days of incorporation and at least four Board meetings every year, with no more than 120 days between consecutive meetings.
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Need advice on Section 173?
This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board: Provided that the Central Government may, by notification, direct that the provisions of this sub-section shall not apply in relation to any class or description of companies or shall apply subject to such exceptions, modifications or conditions as may be specified in the notification. (2) The participation of directors in a meeting of the Board may be either in person or through video conferencing or other audio visual means, as may be prescribed, which are capable of recording and recognising the participation of the directors and of recording and storing the proceedings of such meetings along with date and time: Provided that the Central Government may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio visual means. Provided further that where there is quorum in a meeting through physical presence of directors, any other director may participate through video conferencing or other audio visual means in such meeting on any matter specified under the first proviso. (3) A meeting of the Board shall be called by giving not less than seven days' notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means: Provided that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting: Provided further that in case of absence of independent directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the directors and shall be final only on ratification thereof by at least one independent director, if any. (4) Every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees. (5) A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: Provided that nothing contained in this sub-section and in section 174 shall apply to One Person Company in which there is only one director on its Board of Directors.
Introduction
Directors may take part in person or through prescribed video conferencing or other audio-visual means that can record and recognise their participation and record and store the proceedings with the date and time. The Central Government may notify matters that cannot be dealt with through video conferencing. Since 7 May 2018, if a physical quorum is present, other directors may join such a meeting by video conferencing.
A Board meeting needs at least seven days' written notice to every director at their registered address, by hand delivery, post or electronic means. A meeting at shorter notice to transact urgent business needs at least one independent director, if any, to be present. Otherwise, decisions are final only after ratification by at least one independent director, if any. One Person Companies, small companies and dormant companies comply if they hold one meeting in each half of a calendar year, at least ninety days apart.
Key takeaways
Frequency
First meeting within thirty days of incorporation, then at least four meetings a year with gaps of no more than 120 days.
Notice
Seven days' written notice to every director. Shorter notice for urgent business needs an independent director present or ratification by one.
Penalty
An officer who fails to give the notice is liable to a penalty of twenty-five thousand rupees.
Schedule meetings
Hold the first Board meeting within thirty days of incorporation. After that, hold at least four meetings each year so that no more than 120 days pass between consecutive meetings. The Central Government may, by notification, disapply subsection (1) for a class or description of companies or apply it with exceptions, modifications or conditions.
Use video conferencing correctly
Participation may be in person or through video conferencing or other audio-visual means, as prescribed, that can record and recognise directors' participation and record and store the proceedings with the date and time.
The Central Government may notify matters that cannot be dealt with by video conferencing. Section 56 of the Companies (Amendment) Act, 2017, in force from 7 May 2018, added a further proviso. Where a quorum is physically present, any other director may join through video conferencing even for those matters.
Give proper notice
Send at least seven days' written notice to every director at the address registered with the company, by hand delivery, post or electronic means. For urgent business at shorter notice, at least one independent director, if any, must be present. If none is present, decisions are circulated to all directors and become final only when at least one independent director, if any, ratifies them. An officer whose duty is to give notice and who fails to do so is liable to a penalty of twenty-five thousand rupees.
Apply the relaxed rule for small entities
A One Person Company, small company or dormant company is deemed to comply if it holds at least one Board meeting in each half of a calendar year, at least ninety days apart. Neither subsection (5) nor section 174 applies to a One Person Company with only one director.
Check class-specific exemptions
The MCA e-book for the Act lists exemption or modification notifications under this section for Section 8 companies, Specified IFSC public and private companies and certain private companies. Read the current notification before applying the general rule to those companies.
Practical preparation
Diarise the first meeting and the 120-day gaps; send notices seven days ahead to registered addresses; keep proof of delivery; for meetings at shorter notice, secure an independent director's presence or ratification; check the current list of matters restricted from video conferencing.
Practical checklist
Do
- Keep proof that notice was sent to every director.
- Plan the annual meeting calendar so that no gap exceeds 120 days.
Avoid
- Do not deal with notified restricted matters entirely by video conference without a physical quorum.
- Do not treat decisions taken at short notice as final without an independent director's presence or ratification, where the company has one.
Illustrative example
Hypothetical: urgent Board meeting
A company needs Board approval within two days and has two independent directors.
Call
Call the meeting at shorter notice to transact the urgent business.
Attend
Ensure at least one independent director attends.
Fallback
If neither attends, circulate the decisions to all directors and obtain ratification from at least one independent director.
Outcome
- The decision is final if an independent director attends, or once one ratifies it.
Glossary
- Audio-visual means
- Prescribed electronic means that can record and recognise directors' participation and record and store the proceedings.
- Shorter notice
- Notice of less than seven days, allowed for urgent business on the conditions in the provisos to section 173(3).
Frequently asked questions
How many Board meetings are required each year?
At least four, with no more than 120 days between consecutive meetings. Section 173(5) provides a relaxed rule for One Person Companies, small companies and dormant companies.
Can directors join by video conference for restricted matters?
Since 7 May 2018, yes, if a quorum is physically present. Other directors may then participate by video conferencing on those matters.
Need help applying this provision to your situation?
Contact BizeneedLast updated 11 October 2026