Directors, Board Meetings and Corporate Governance
Directors, Board Meetings and Corporate Governance
This domain tests board composition, disqualifications, meeting rules and governance controls.
Core rules
- Minimum directors: 3 public, 2 private, 1 OPC; maximum 15, increased by special resolution. At least one resident director who stayed in India ≥182 days in the financial year. Prescribed companies need a woman director and independent directors.
- DIN is mandatory. Section 164 disqualifications include undischarged insolvency, conviction for specified offences, failure to file financial statements/returns for 3 years, and disqualification orders.
- Board meetings: first within 30 days of incorporation; at least 4 per year; gap not more than 120 days; notice at least 7 days; quorum is one-third of total strength or 2 directors, whichever is higher.
- Section 180 requires special resolution for certain powers, including selling/leasing the undertaking and borrowing beyond limits.
Worked example
A public company has 9 directors. The board wants to sell its only manufacturing unit. A board resolution is insufficient; Section 180(1)(a) requires a special resolution of members. The board must convene a general meeting and pass the resolution by 75% of votes cast.
Traps
Maximum 15 is not fixed absolutely; a special resolution can increase it. Resident director is not the same as Indian citizen. Interested directors and quorum rules are frequently tested. A private company still needs board meetings and statutory compliance.