CS Edge – Issue 3: Once a quarter Board Meeting requirement done away with

On August 30, 2017, the Institute of Company Secretaries of India (ICSI) issued a revised set of Secretarial Standards as applicable to Meetings of Board of Directors (SS-1) and General Meetings (SS-2).

The revised Standards are effective from October 1, 2017.

These Standards prescribe a set of guiding principles for convening and conducting Meetings of the Board of Directors and the Meetings of Shareholders of the Company and matters related thereto.

Many of the amendments have been so that they are in line with the Companies Act, 2013 and various exemption notifications issued by Ministry of Corporate Affairs (MCA) thereon.

In this third issue of CS Edge, I will highlight the key amendments in these Standards.

Key Amendments in Secretarial Standard on Board Meetings (SS-1):

1. Secretarial Standards – 1 do not apply to OPC and Section 8 companies.
2. A meeting can be held on any day, even on a National holiday.
3. Day to be added in the heading of notice.
4. Proof of sending Notice, Agenda, Notes to Agenda and draft Minutes and the proof of their delivery shall be maintained by the company for such period as decided by the Board. But it should not be less than three years from the date of the Meeting.
5. The company should hold atleast four meeting in a calendar year. The mandatory requirement of holding one meeting in each calendar quarter is done away with.
6. A Director cannot participate nor will be included in Quorum in respect of item of business in which he is interested. However, in case of a private company, a Director can do so after disclosure of his interest.
7. If the discussion is about a related party transaction, then an interested Director cannot be present at the meeting, whether physically or through Electronic Mode, during discussions and voting on such item.
8. Whenever any unsigned documents, including reports or notes or presentations are presented at the Meeting and a decision of the Board is based on such documents, such documents will be initialled by the Company Secretary or the Chairman of the meeting.
9. The Report of the Board of Directors should include a statement on compliance of applicable Secretarial Standards.

Key Amendments in Secretarial Standard on General Meetings (SS-2):

1. Secretarial Standards – 2 do not apply to OPC and Section 8 companies.
2. In case of companies having a website, the Notice shall simultaneously be hosted on the website till the conclusion of the Meeting. In case of a private company, the Notice should be hosted on the website of the company, if any, unless otherwise provided in the Articles.
3. Notice of the Annual General Meeting should specify the serial number of the Meeting.
4. In case of a Government company, the Annual General Meeting (AGM) shall be held at its registered office or any other place with the approval of the Central Government, as may be required in this behalf.
5. An instrument to appoint a proxy should be in the form prescribed under the Act.
6. In case of a private company, a member who is a related party is entitled to vote on such Resolution.
7. Minutes Books should be kept only at the Registered Office of the company.
8. Minutes of AGM should also state the serial number of the Meeting.
9. Minutes of the AGM need not specify the time of conclusion of meeting.

Most of the amendments in the SS -2 are to reflect the effect of MCA’s exemptions given to private companies vide notification dated June 5, 2015.

Click here to read the full text of Secretarial Standards on Board Meetings.

Click here to read the full text of Secretarial Standards on General Meetings.

Click here to read a comparative analysis by ICSI of Secretarial Standards on Board Meetings.

Click here to read a comparative analysis by ICSI of Secretarial Standards on General Meetings