Board meetings are not just formalities. They are where strategy takes shape, compliance begins, and accountability quietly settles in. Section 173 of the Companies Act, 2013 governs the meeting of the Board of Directors, laying down when meetings must be held, how often, and in what manner.
From mandating the first board meeting within 30 days of incorporation to requiring a minimum of four meetings every year with a strict 120-day gap rule, this section ensures that governance does not drift into neglect. It also modernizes decision-making by allowing video conferencing and sets clear consequences for non-compliance.
If you’re a director or founder, understanding Section 173 is not optional—it’s foundational.
What Is Section 173 of the Companies Act, 2013?
In simple terms, Section 173 deals with the meeting of the Board of Directors.
It defines:
- When the first board meeting must be held
- How many meetings are required annually
- Maximum gap allowed between meetings
- Notice period for board meetings
- Mode of participation, including virtual attendance
The intent is clear: ensure regular oversight, transparency, and active involvement of directors.
First Board Meeting: The 30-Day Rule
This is where many new companies slip—often innocently.
Section 173 requires a first board meeting within 30 days of incorporation.
In fact, every company is required to conduct its first Board of Directors meeting within a period of thirty days from the date of its incorporation.
This first meeting usually covers:
- Appointment of auditors
- Disclosure of directors’ interests
- Adoption of preliminary policies
- Opening of bank accounts
I’ve seen startups delay this, assuming incorporation paperwork is enough—only to face corrective filings later.
Minimum Number of Board Meetings per Year
Once the first meeting is done, the rhythm must continue.
Under Section 173 of the Companies Act, 2013, a company must:
- Conduct at least four board meetings every year
- Ensure no more than 120 days between any two meetings
This rule keeps directors actively engaged with the company’s functioning rather than just appearing on paper.
Special relaxation for certain companies
- One Person Companies (OPCs)
- Small companies
- Dormant companies
These are allowed to hold:
- At least one meeting in each half of the calendar year
- With a minimum 90-day gap between meetings
Notice of Board Meeting: The 7-Day Requirement
One of the most practical parts of Section 173 is about notice.
It clearly states that every board meeting shall be called by giving at least 7 days’ notice in writing to every director.
The notice must include:
- Date, time, and venue
- Option to attend via video conferencing
- Agenda details (preferably)
Shorter notice meetings are allowed—but only if:
- At least one Independent Director is present
- Or decisions are ratified later by an Independent Director
Skipping notice isn’t a harmless oversight—it attracts penalties.
Mode of Participation: Physical or Virtual
Section 173 acknowledged reality before many companies did.
Directors are allowed to:
- Participate in person
- Or through video conferencing or other audio-visual means
However:
- Proper recording of attendance is mandatory
- Certain sensitive matters may still require physical presence (as per rules)
This flexibility has made governance smoother, especially for companies with directors in different cities or countries.
Quorum and Section 173: How They Connect
While quorum is mainly governed by Section 174, board meetings under Section 173 must still:
- Meet quorum requirements
- Ensure participation validity for decisions taken
Without quorum, a meeting—no matter how well-noticed—is ineffective.
Penalties for Non-Compliance
The law rarely threatens loudly, but it does act.
If a company fails to comply with Section 173 requirements (especially notice-related provisions):
- The company may be fined up to ₹25,000
- Every officer in default may also be fined
In practice, repeated non-compliance creates:
- Audit qualifications
- MCA scrutiny
- Director accountability issues
Why Section 173 Matters More Than It Seems
On paper, it’s about meetings. In reality, it’s about governance culture.
Regular board meetings:
- Prevent unilateral decision-making
- Protect minority shareholders
- Strengthen compliance discipline
- Create documentary proof of due diligence
As a professional, I’ve seen companies sail smoothly during disputes simply because their board meetings were timely, documented, and compliant.
Common Mistakes Companies Make
Here are a few recurring ones:
- Missing the 30-day first meeting deadline
- Ignoring the 120-day gap rule
- Sending informal messages instead of written notice
- Not recording video conference participation properly
Each seems small. Together, they become costly.
Best Practices to Stay Compliant
To keep Section 173 from becoming a stress point:
- Maintain a board meeting calendar
- Use standardized notice formats
- Record minutes promptly
- Ensure directors confirm attendance mode
- Keep proof of delivery of notices
Compliance becomes easy when it’s built into routine.
Conclusion
Section 173 of the Companies Act, 2013 is not about box-ticking—it’s about making boards function the way they were meant to. It requires the first board meeting within 30 days, mandates at least four meetings every year, enforces a maximum 120-day gap, and clearly states that every board meeting shall be called by giving at least 7 days’ notice in writing. By allowing video conferencing and imposing penalties for lapses, it balances flexibility with responsibility.
Strong companies are built in boardrooms. Section 173 simply ensures those rooms are never empty.
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