4 May 2021

Clarification issued by Ministry of Corporate Affairs (MCA) on 3 May 2021 for board meetings

Existing provision of the Companies Act, 2013
Section 173 of the Companies Act, 2013 (Act) prescribes that the gap between two consecutive board meetings should not exceed 120 days.

The proposed change by MCA
Given the difficulties arising from the resurgence of COVID-19 and requests received from stakeholders, the MCA has decided that the gap between two consecutive board meetings prescribed by Section 173 of the Act (120 days) shall be extended by a period of 60 days. Accordingly, the gap between two consecutive board meetings shall not exceed 180 days instead of 120 days.

Applicability of change proposed by MCA
This relaxation, enabling the gap between two consecutive board meetings to extend to 180 days shall be applicable for the quarters:

April 2021 to June 2021
July 2021 to September 2021

Our Comments
We see this as a welcome change in current times where COVID-19 cases are on the rise. This relaxation shall grant a cushion enabling the Board to conduct meetings at relaxed intervals, thus countering any immediate threat to physical well-being owing to the pandemic and ensuring that the management and administration of the company stay unperturbed.

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