Written by the Delhi Legal Company India Entry & FDI Advisory team · Last updated August 2026 · Reviewed against Sections 117, 118, 173, 174, 175 and 184 of the Companies Act, 2013
Introduction
Three things about Indian board meetings deserve a foreign group’s attention, and the first is a correction.
A great deal of current guidance says certain matters — approval of financial statements, the Board’s Report, mergers — cannot be dealt with by video conferencing. That restriction sat in Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014. By Notification No. GSR 409(E) dated 15 June 2021, Rule 4 was permanently deleted. With effect from 15 June 2021 a company can hold a board meeting through video conferencing and discuss any agenda in such a meeting.
Rule 4 was in every checklist for seven years, and pages published in 2026 still describe it as live. Section 6 sets out how to treat that.
The second is a trap that removes directors without anyone deciding anything. A foreign director who does not attend for 12 months loses the directorship, and the company must then file DIR-12 to report the vacation of office.
For a group whose Indian board includes parent nominees who have never attended, that is a live problem.
The third is not a compliance point at all. The minutes must record the city and country from which each remote director participated. That record is contemporaneous evidence of where your company’s decisions are made — which is the central question in the place of effective management analysis.
Your board minutes are a tax document. Most groups do not treat them as one.
About this guide
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. Board governance is where several other obligations are discharged — the Board’s Report disclosures, related party approvals, the CSR position — and it is usually run as an administrative task.
Where a rule is settled we state it. Where guidance is out of date or the statute is ambiguous — and on two points here it is — we say so and give the course that satisfies both readings.
Primary source: the Ministry of Corporate Affairs for the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014, together with Secretarial Standard 1 issued by the ICSI.
1. How many meetings, and how far apart
Section 173 provides that every company, private or public, shall hold the first meeting of the Board of Directors within 30 days of the date of incorporation, and a minimum of four meetings of its Board every year. There should not be a gap of more than 120 days between two consecutive board meetings.
| Requirement | Position |
|---|---|
| First meeting | Within 30 days of incorporation |
| Minimum number | Four per year |
| Maximum gap | 120 days between consecutive meetings |
| OPC, small and dormant companies | At least one meeting in each half of a calendar year, with a gap of not less than 90 days |
| OPC with a single director | Section 173 and the Section 174 quorum requirements do not apply |
1.1 Both limbs must be satisfied
Four meetings alone is not compliance. Four meetings held in the last two months of the year satisfies the number and breaches the 120-day gap.
For foreign-owned companies this means planning at least one board meeting per quarter.
That is the practical answer, and it is also how the two limbs are satisfied without arithmetic.
1.2 Note the reversed test for small companies
For a one person, small or dormant company, the requirement is a gap of not less than ninety days — a minimum, not a maximum.
Two meetings held a fortnight apart do not satisfy it, even though there are two.
2. Calendar year or financial year
An ambiguity worth naming, because published guidance divides on it.
Since the word used is “year” and not “financial year”, it has been interpreted to mean “calendar year” for the purpose of Section 173.
Other guidance describes the requirement as a minimum of four Board meetings in each financial year.
2.1 How to resolve it
You do not have to. Hold one meeting in each calendar quarter and both readings are satisfied simultaneously, with the 120-day gap comfortably observed.
Groups that batch meetings around the financial year end — a March meeting to approve accounts, a September meeting for the AGM — are the ones who find the question matters.
3. Notice
Section 173(2) requires seven days’ notice, which can be shorter with independent director consent.
Minimum seven days’ notice in writing, which can be sent electronically. Shorter notice is allowed for urgent business, with at least one independent director present where applicable.
3.1 The shorter notice condition
Shorter notice is available for urgent business. Where the company is required to have independent directors, at least one must be present at the meeting held on shorter notice — and if none is present, the decisions taken require circulation to and ratification by at least one independent director.
For a wholly owned foreign subsidiary with no independent directors, the condition does not bite in the same way. The seven-day notice period still applies as the default.
3.2 Electronic notice is fine
Notice in writing includes electronic means, which matters for a board spread across timezones. Keep the sent record — it is the evidence that notice was given.
4. Quorum
Under Section 174, quorum is one-third of total strength or two directors, whichever is higher. Participation through video conferencing is allowed.
| Board size | One-third | Quorum |
|---|---|---|
| 2 directors | 1 | 2 |
| 3 directors | 1 | 2 |
| 4 directors | 2 | 2 |
| 6 directors | 2 | 2 |
| 9 directors | 3 | 3 |
4.1 Directors on video count
Directors attending via video conferencing are counted for quorum.
This is the point that makes a distributed board workable. A meeting where the resident director is in Delhi and two parent nominees join from London and Singapore has quorum.
4.2 Quorum must hold throughout
The minutes must confirm that quorum was met throughout the meeting.
Not merely at the start. A director dropping off a call mid-meeting can break quorum, and business transacted after that point is exposed.
For a video meeting across timezones, that is a real risk and it should be actively managed by the chair.
4.3 If quorum fails
Under Section 174(4), if a board meeting is adjourned for want of quorum then, unless the articles provide otherwise, the adjourned meeting shall be held on the same day in the next week at the same time and place, or if that day is a national holiday, on the next succeeding day which is not a national holiday, at the same time and place.
5. Video conferencing: the current position
Section 173 of the Companies Act, 2013, read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014, explicitly permits directors to participate in board meetings through video conferencing.
Such meetings may be attended by the directors either in person or through video conferencing or other audio-visual means which are capable of recording and recognising the participation of the directors and recording and storing the proceedings of such meetings along with date and time.
5.1 Rule 4 was deleted
The MCA, by Notification No. GSR 409(E) dated 15 June 2021, notified an amendment to the Companies (Meetings of Board and its Powers) Rules, 2014, by which Rule 4 was permanently deleted. Rule 4 had restricted some matters which could not be discussed in a board meeting through video conferencing. With effect from 15 June 2021, a company can hold a board meeting through video conferencing and discuss any agenda in such a meeting. There is no restriction on any agenda for board meeting through video conferencing.
Relaxation from the restriction had previously been granted in a phased manner from March 2020 to 30 June 2021 during the pandemic. The 2021 notification made the position permanent by removing the rule rather than extending a relaxation.
5.2 Guidance that says otherwise
Several sources published in 2026 still list restricted matters — approval of the annual financial statement, the Board’s Report, the prospectus, and matters relating to amalgamation or merger — as items that cannot be approved by video conferencing.
That describes the pre-June 2021 position. Rule 4 had been in every compliance checklist for seven years and it has propagated.
5.3 The honest qualification
The enabling power survives. The Central Government may issue a notification specifying certain matters that cannot be discussed or resolved via video conferencing or audiovisual means.
So the statute retains the power to restrict; the rule that exercised it was omitted. A future notification could reinstate restrictions.
Practical guidance. Rely on the current position for ordinary business. For a high-stakes item — a merger approval, a transaction that will be scrutinised in diligence — consider physical presence as belt and braces, and confirm the position at the time. The cost of one physical meeting is lower than the cost of arguing about it later.
6. The minutes, and why they are a tax document
The minutes must record the names of all directors present and their mode of attendance, in person or via video conferencing; the city and country from which each remote director participated; confirmation that quorum was met throughout the meeting; and a summary of all discussions and resolutions passed.
Not recording attendance properly is a common failure — video conferencing attendance must be specifically recorded in the minutes, including the location from which the director participated.
6.1 The location record and POEM
This is the connection foreign groups should make and rarely do.
The place of effective management test asks where the key management and commercial decisions for the business as a whole are, in substance, made. Board minutes recording who participated and from where are the primary contemporaneous evidence on that question.
Three consequences follow.
The record is being created either way. The minutes will show the pattern, whatever it is. The only choice is whether the pattern was considered in advance.
Deliberation matters more than the resolution. Minutes recording a decision with no discussion suggest the discussion happened elsewhere. Where the parent company’s residence position depends on decisions being made outside India, minutes that record substantive deliberation at the meeting are the evidence; minutes that record ratification are not.
The pattern is visible over years. A single meeting proves little. Four meetings a year over five years is a record, and it is read as one.
See place of effective management.
6.2 Timing and signature
Minutes must be recorded within 30 days and signed by the Chairman under Section 118.
6.3 The penalty
The penalty for non-compliance with minutes requirements is ₹25,000 for the company and ₹5,000 for every officer in default.
7. Circular resolutions and their limits
For routine matters that do not require discussion, Section 175 of the Companies Act permits passing resolutions by circulation instead of holding a board meeting.
7.1 What cannot be done by circulation
As per Rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014, certain matters cannot be passed by circular resolution, including approval of financial statements.
Rule 8, read with Section 179(3), sets out powers exercisable only at a meeting of the board. In broad terms these are the significant corporate decisions — approving financial statements and the Board’s Report, borrowing and investing decisions, granting loans and guarantees, approving amalgamation, diversifying the business, and similar matters.
Check the current Rule 8 list against your agenda before circulating anything material.
7.2 Circulation is not a substitute for the meeting count
A common misconception. Resolutions passed by circulation do not count toward the four meetings, and they do not reset the 120-day clock.
A company that transacts everything by circulation and holds no meetings has breached Section 173 regardless of how much business it did.
7.3 The POEM angle again
Where residence is a live question, resolutions passed by circulation are weaker evidence of where decisions are made than minuted deliberation at a meeting held outside India.
Convenience and evidential strength pull in opposite directions here, and the choice should be conscious.
8. Interested directors
Interested directors must disclose their interest under Section 184 and abstain.
For a foreign-owned subsidiary this arises constantly, because so much of what the board approves is with the parent or a group company — service agreements, loans, royalty arrangements, cost recharges.
A director who is also an officer of the counterparty is interested. The disclosure goes in Form MBP-1, the interest is recorded, and the director does not participate in that item.
The register of contracts in which directors are interested — MBP-4 — is the record that follows. See statutory registers under the Companies Act and related party transactions under Section 188.
9. Filing resolutions
Prescribed resolutions must be filed via Form MGT-14 within 30 days under Section 117.
Not every board resolution is filed. Those specified under Section 117(3), including certain resolutions under Section 179(3), require MGT-14 within thirty days.
The failure pattern is a board that passes a resolution correctly and never files it, because the filing is an afterthought once the decision is taken.
Build the MGT-14 check into the post-meeting process: which resolutions passed today require filing, and by when.
10. The twelve-month absence trap
The provision that removes a director without anyone deciding to.
A foreign director who does not attend for 12 months loses the directorship. The company must then file DIR-12 to report the vacation of office.
10.1 Why this catches foreign groups specifically
Indian boards of foreign subsidiaries are frequently populated with parent nominees appointed for structural reasons — a group CFO, a regional head — who have no operational involvement and never join the calls.
Twelve months of absence from all board meetings vacates their office by operation of law.
10.2 The consequences compound
The company must file DIR-12. If it does not, the ROC record shows a director who is no longer one.
And the board that continues meeting may find its quorum was never valid, because a person counted toward it had already ceased to hold office.
For a three-director board where quorum is two, losing one nominee this way is material.
10.3 The answer is attendance or resignation
Either the nominee attends — and video conferencing makes that straightforward — or they resign and are replaced by someone who will.
A board seat held by someone who never attends serves no governance purpose and creates exposure, including under the disqualification provisions. See director disqualification under Section 164.
11. Secretarial Standard 1
Section 118(10) mandates every company to observe secretarial standards with respect to general and board meetings specified by the Institute of Company Secretaries of India and approved by the Central Government.
SS-1 is not guidance. It is a mandatory standard, and it prescribes matters the Act leaves open — the contents of notice, the manner of recording attendance, how minutes are maintained and numbered, and the handling of dissent.
A company whose minutes follow a template imported from abroad will not meet SS-1 in form, even where the substance is sound.
12. Penalties
| Failure | Consequence |
|---|---|
| Minutes requirements | ₹25,000 for the company and ₹5,000 for every officer in default |
| Board meeting compliance generally | ₹25,000 on the company and ₹5,000 to ₹1 lakh on each director |
| Twelve-month absence | Office vacated; DIR-12 required |
| Unfiled MGT-14 | Penalty and an incomplete public record of the company’s decisions |
The monetary amounts are modest. The consequences that matter are structural — a vacated directorship, an invalid quorum, or minutes that undermine a residence position.
13. Two situations, worked through
Scenario A — The nominee who never attended
A Japanese group’s Indian subsidiary has three directors: the resident director in Mumbai, the India country manager, and the group CFO in Tokyo appointed at incorporation for structural reasons. The CFO has never joined a meeting.
The position. Twelve months of absence from all board meetings vacates the office by operation of law. DIR-12 should have been filed.
The compounding problem. The board continued meeting with the CFO counted on the attendance list as “leave of absence granted”, and on at least one occasion only two people participated — one of whom no longer held office. Quorum for a three-director board is two.
What was needed. Either the CFO joins the calls, which video conferencing makes straightforward, or resigns and is replaced by someone who will.
Scenario B — The minutes that answered the wrong question
A European group’s Indian subsidiary holds its four meetings a year, properly noticed, with quorum. The minutes are efficient: each item is recorded as “the Board considered and approved” with the resolution text and nothing else.
Where it goes wrong. The group’s overseas holding company later faces a place of effective management enquiry. The Indian subsidiary’s minutes, and the group’s, show decisions recorded without deliberation — which supports the argument that the deliberation happened somewhere other than the meeting.
What would have helped. Minutes recording the substance: what was presented, what was discussed, what alternatives were considered, and the basis for the decision. Together with the location record, that is the contemporaneous evidence the analysis turns on.
The lesson. Efficient minutes are a false economy where a residence question exists.
14. Twelve mistakes
- Holding four meetings but breaching the 120-day gap, which satisfies one limb and fails the other.
- Batching meetings around the financial year end rather than one per quarter.
- Relying on outdated guidance about restricted video conferencing matters, when Rule 4 was deleted with effect from 15 June 2021.
- Not recording the city and country from which each remote director participated.
- Confirming quorum only at the start, when it must hold throughout.
- Minutes that record decisions without deliberation, which undermine the residence position.
- Treating circular resolutions as a substitute for meetings. They do not count toward the four or reset the 120-day clock.
- Circulating a resolution on a matter reserved to a meeting under Rule 8.
- Not disclosing interest under Section 184 on group transactions, which for a subsidiary is most of the agenda.
- Passing a resolution and never filing MGT-14 within thirty days.
- Leaving a parent nominee on the board who never attends, vacating their office after twelve months.
- Using a foreign minutes template that does not meet Secretarial Standard 1.
15. Checklist
The calendar
- First board meeting held within 30 days of incorporation
- One meeting scheduled in each calendar quarter, satisfying both the four-meeting and 120-day requirements on either reading of “year”
- Gap between consecutive meetings checked against 120 days before rescheduling anything
- Dates set a year ahead so timezone availability is planned, not negotiated
Convening
- Seven days’ written notice to every director, electronic acceptable, with the sent record kept
- Agenda circulated with supporting papers
- Matters reserved to a meeting under Rule 8 identified and not circulated
- Interested directors identified in advance, with MBP-1 disclosures current
Conducting
- Quorum of one-third or two directors, whichever is higher, present at commencement
- Quorum actively monitored throughout, particularly on video meetings across timezones
- Interested directors abstain from the relevant item and it is recorded
- Substantive deliberation, not ratification of decisions taken elsewhere
Recording
- Names of all directors present and mode of attendance
- City and country from which each remote director participated
- Confirmation that quorum was met throughout
- Summary of discussions, not only the resolutions
- Minutes recorded within 30 days and signed by the Chairman
- Format compliant with Secretarial Standard 1
After the meeting
- Resolutions requiring MGT-14 identified and filed within 30 days
- Statutory registers updated, including MBP-4 for interested contracts
- Attendance reviewed against the twelve-month rule for every director
- DIR-12 filed where any office has been vacated
Do you know who has attended your Indian board this year?
A parent nominee who has not attended in twelve months has already lost the office, which may mean a meeting you thought had quorum did not. Send us your board composition and this year’s meeting dates and we will tell you whether the schedule is compliant, whether anyone’s office has been vacated, and what your minutes should be recording.
16. Frequently asked questions
Q1. How many board meetings must an Indian company hold?
The first within 30 days of incorporation, and thereafter a minimum of four meetings every year, with a gap of not more than 120 days between two consecutive meetings. One person companies, small companies and dormant companies need only one meeting in each half of a calendar year with a gap of not less than 90 days.
Q2. Is four meetings a year enough on its own?
No. Both limbs must be satisfied — four meetings held in the last two months of the year satisfies the number and breaches the 120-day gap. Planning one meeting per calendar quarter satisfies both without arithmetic.
Q3. Does “year” mean calendar year or financial year?
Guidance divides on it. Some argue that since the word used is “year” rather than “financial year” it means the calendar year; others describe the requirement as four meetings per financial year. Holding one meeting in each calendar quarter satisfies both readings, so the question need not be resolved.
Q4. What notice is required?
Seven days’ notice in writing to every director, which may be sent electronically. Shorter notice is permitted for urgent business, subject to the independent director condition where the company is required to have them.
Q5. What is the quorum for a board meeting?
One-third of total strength or two directors, whichever is higher. For most foreign-owned subsidiaries with three or four directors, that means two.
Q6. Do directors on video conferencing count toward quorum?
Yes. Directors attending via video conferencing are counted for quorum, which is what makes a distributed board workable — a meeting with the resident director in Delhi and parent nominees joining from London and Singapore has quorum.
Q7. Must quorum be present throughout?
Yes, not merely at the start, and the minutes must confirm it. A director dropping off a call mid-meeting can break quorum, and business transacted after that point is exposed — a real risk on video meetings across timezones.
Q8. What happens if a meeting lacks quorum?
Under Section 174(4), unless the articles provide otherwise, the adjourned meeting is held on the same day in the next week at the same time and place, or if that is a national holiday, on the next succeeding non-holiday day.
Q9. Are there matters that cannot be dealt with by video conferencing?
Not currently. Rule 4 of the Companies (Meetings of Board and its Powers) Rules, which restricted certain matters, was permanently deleted by Notification No. GSR 409(E) dated 15 June 2021, and from that date a company can hold a board meeting through video conferencing and discuss any agenda.
Q10. Why does other guidance still list restricted matters?
Because Rule 4 was in every compliance checklist for seven years and the position has propagated. Several sources published in 2026 still list approval of financial statements, the Board’s Report, the prospectus and mergers as restricted, which describes the pre-June 2021 position.
Q11. Could the restrictions come back?
The enabling power survives — the Central Government may notify matters that cannot be dealt with by video conferencing. The statute retains the power; the rule exercising it was omitted. For a high-stakes item, consider physical presence as belt and braces and confirm the position at the time.
Q12. What must board minutes record?
The names of all directors present and their mode of attendance, the city and country from which each remote director participated, confirmation that quorum was met throughout, and a summary of all discussions and resolutions passed.
Q13. Why does the location record matter beyond compliance?
Because it is contemporaneous evidence of where the company’s decisions are made, which is the central question in the place of effective management analysis. The record is being created either way — the only choice is whether the pattern was considered in advance.
Q14. Should minutes record discussion or only decisions?
Discussion, where a residence question exists. Minutes recording a decision with no deliberation suggest the deliberation happened elsewhere, which is precisely the inference a place of effective management enquiry draws. Efficient minutes are a false economy in that situation.
Q15. When must minutes be recorded and signed?
Within 30 days, signed by the Chairman under Section 118. The penalty for non-compliance is ₹25,000 for the company and ₹5,000 for every officer in default.
Q16. Can resolutions be passed without a meeting?
Yes, by circulation under Section 175, for routine matters that do not require discussion. But Rule 8 of the Companies (Meetings of Board and its Powers) Rules reserves certain matters to a meeting, including approval of financial statements, so the current Rule 8 list should be checked against the agenda.
Q17. Do circular resolutions count toward the four meetings?
No, and they do not reset the 120-day clock. A company that transacts everything by circulation and holds no meetings has breached Section 173 regardless of how much business it did.
Q18. What must an interested director do?
Disclose the interest under Section 184 and abstain from that item. For a foreign-owned subsidiary this arises constantly, since much of what the board approves is with the parent or a group company — service agreements, loans, royalties and cost recharges.
Q19. Which resolutions have to be filed?
Those prescribed under Section 117, filed in Form MGT-14 within 30 days. The common failure is a board that passes a resolution correctly and never files it, so the MGT-14 check belongs in the post-meeting process.
Q20. What happens if a director never attends?
A director who does not attend for twelve months loses the directorship by operation of law, and the company must file DIR-12 to report the vacation of office. This catches foreign groups whose Indian boards include parent nominees appointed for structural reasons.
Q21. What does that do to past meetings?
It can invalidate quorum. A board that continued meeting while counting a person who had already ceased to hold office may find its quorum was never valid — material for a three-director board where quorum is two.
Q22. Do Secretarial Standards apply?
Yes. Section 118(10) mandates every company to observe the secretarial standards on general and board meetings specified by the ICSI and approved by the Central Government. SS-1 is a mandatory standard, not guidance, and a minutes template imported from abroad will generally not meet it in form.
Related reading
- Place of effective management — why your minutes are a tax document
- Director disqualification under Section 164 — the other way a directorship is lost automatically
- Related party transactions under Section 188 — the approvals that fill a subsidiary’s agenda
- Statutory registers under the Companies Act — the records that follow each meeting
Talk to us about your board calendar
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. Board calendars and notices, minutes drafted to Secretarial Standard 1 and to the evidential standard a residence enquiry requires, MGT-14 and DIR-12 filings, interested director disclosures and the statutory registers behind them — run as one secretarial function.
How we usually start. Send us your board composition, this year’s meeting dates and a recent set of minutes. We come back with whether the schedule is compliant, whether any office has been vacated for non-attendance, what the minutes should be recording, and which resolutions needed filing.