Section 173 of Companies Act, 2013 – Board Meetings Explained Simply

Introduction to Board Meetings Under Companies Act, 2013

Every company may have shareholders, but it is the Board of Directors that actually runs the show. Decisions don’t happen magically. They happen in boardrooms. Sometimes physical, sometimes virtual, but they must happen.

That’s why the law takes board meetings seriously.

The Companies Act, 2013 does not treat board meetings as a formality. It treats them as proof that a company is alive, thinking, and being managed. This is where Section 173 of Companies Act, 2013 steps in.

Section 173 lays down the basic discipline. When meetings should happen. How often. Who must attend. And how participation can take place. Without this section, companies could exist only on paper, with directors who never meet and never decide anything. The law clearly doesn’t allow that.

What Section 173 of Companies Act, 2013 Really Covers

In simple terms, Section 173 of Companies Act, 2013 deals with board meetings. Nothing fancy. Just the basics that every company must follow.

First, the law says that the first board meeting must be held within 30 days of incorporation. No excuses. This meeting kickstarts governance.

After that, the company must hold at least four board meetings every year. There should not be a gap of more than 120 days between two meetings.

These rules exist for one reason. Directors should not be directors only on paper. They are expected to participate, question, approve, and guide.

Why Board Meetings Matter More Than People Think

Many promoters see board meetings as paperwork. That’s where problems start.

Board meetings are where:

• Financial performance is reviewed

• Contracts are approved

• Compliance status is discussed

• Risks are flagged

Under the Companies Act 2013, board meetings are a governance tool. Section 173 ensures companies don’t quietly drift without oversight.

Regular meetings mean decisions are not impulsive. They are discussed. Recorded. Defensible. And that matters a lot when regulators or investors come knocking.

First Board Meeting – Not Just a Formality

The first board meeting within 30 days is not symbolic. It’s practical.

This is where companies usually:

• Appoint key managerial personnel

• Open bank accounts

• Approve preliminary contracts

• Take note of incorporation documents

If this meeting is delayed or skipped, problems follow. Statutory filings get affected. Audits raise questions. It’s a small delay that creates a long trail of compliance issues.

Minimum Number of Board Meetings Every Year

Section 173 clearly mandates four board meetings every year.

Not three. Not “whenever convenient”.

At the same time, the law allows breathing space. The 120-day gap rule ensures meetings are spread out but not rushed. Directors stay engaged without being overloaded.

Smart companies plan their meeting calendar in advance. Others struggle at year-end trying to fix gaps. Guess which ones face penalties.

Attending Board Meetings Through Video Conferencing

Business today is not limited by geography. Directors may be in different cities or even countries.

Recognising this, Section 173 allows participation through video conferencing.

This flexibility is a blessing. But it comes with conditions. The technology must be secure. Attendance must be recorded properly. Certain sensitive matters may still require physical presence depending on applicable rules.

Virtual does not mean casual. The compliance standard remains the same.

Notice of Board Meetings – Small Detail, Big Impact

A board meeting without proper notice is a legal risk.

Section 173 requires that notice of the board meeting must be sent to every director. It must clearly mention:

• Date

• Time

• Venue

• VC details, if applicable

Shorter notice is allowed in urgent cases, but it’s not the norm. Transparency starts with notice. If directors are not informed properly, decisions can be challenged later.

Quorum and Decision Validity

While Section 173 talks about meetings, quorum decides whether decisions are valid.

No quorum. No valid business.

Proper attendance records, voting clarity, and resolution documentation protect both the company and the directors. These details may seem boring until something goes wrong. Then they become critical evidence.

Relaxations for Certain Companies

The law is practical here.

One Person Companies, small companies, and dormant companies get relaxed board meeting requirements. Fewer meetings. Simpler compliance.

But eligibility must be checked carefully. Assuming exemptions without verification is a common and costly mistake.

What Happens If Section 173 Is Ignored?

Non-compliance is not taken lightly.

Penalties can be imposed on:

• The company

• Directors individually

Repeated defaults raise red flags during audits, funding discussions, and due diligence. Even director reputation can take a hit. Section 173 violations may look minor, but they create long-term trust issues.

Board Meetings Beyond Compliance

Good board meetings are not about ticking boxes.

They are where:

• Strategy is shaped

• Risks are questioned

• Controls are strengthened

Section 173 ensures these discussions actually happen. Regularly. With records.

Strong companies don’t treat board meetings as compliance. They treat them as leadership tools.

Documentation and Minutes – Silent Protectors

Minutes are boring until they save you.

Though Section 173 doesn’t go deep into minute-keeping, it works alongside other provisions. Properly written minutes protect directors during disputes, investigations, and regulatory scrutiny.

If it’s not documented, it practically didn’t happen.

Real-World Compliance Challenges

In reality, companies struggle with:

• Director availability

• Late notices

• Poor documentation

• Last-minute scheduling

These issues usually don’t come from bad intent. They come from lack of systems. That’s why professional compliance support makes a real difference.

Why Section 173 Still Matters Today

Corporate governance is under constant watch.

Section 173 of Companies Act, 2013 ensures that companies are not running on autopilot. It forces engagement. Accountability. Structure.

For regulators, it’s reassurance.
For investors, it’s confidence.
For companies, it’s discipline.

Final Thoughts

Section 173 is not just about meetings. It’s about responsibility.

A company that respects its board meetings usually respects its business too. That’s the real spirit of this provision.

Need help with board meeting notices, minutes, VC compliance, or Companies Act filings?

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