Meetings of Board and Its Powers
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.
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.
Legal Commentary & Landmark Judgments: Section 173
Section 173 mandates board meeting frequency (minimum 4 meetings per year, maximum 120-day gap), seven days' advance notice, and the statutory authorization for video-conferencing board meetings.
Shorter notice is permissible to transact urgent business provided at least one independent director is present (or resolutions are circulated and ratified by at least one independent director).
Section 173 is the operational pulse of corporate management. Secretarial audits stringently verify that the 120-day interval between board meetings is never breached, as exceeding 120 days triggers automatic non-compliance on the MCA portal. The video conferencing provisions under Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 mandate secure recording and storage of electronic meeting tapes until the completion of audit.