Quorum Definition, Quorum in the Meeting And Procedure For Quorum is Never Formed

Introduction

To begin with, first of all, let’s see the literal meaning of the term ‘Quorum’:-

The term ‘Quorum’ is Latin and it basically stands for the total number of members or individuals forming a group that is necessarily required to mark their presence so that the business transactions are made or to carry out any legal activity. More precisely, the minimum number of members that are required to be present in order for a meeting to start, forms a Quorum. Further, a Quorum is responsible to make decisions and carry out concerning legal activities or proceedings. Individuals forming a quorum possess common/vested interest that is to bring about profit to the company or we can say the common interest of the betterment of the company. A meeting is considered to be as valid only and only if Quorum is present else is declared to be null and void.

Advantage of Quorum

The advantage of a Quorum is that there is a presence of required sufficient representation at meetings and thus the board can conduct changes with more accuracy and efficiency if needed or if any. This arrangement of quorum literally helps a company or an organization to prevent fewer members from taking decisions on behalf of the entire company. Initially, a Quorum consisted of one more than half of the possible membership, but nowadays, it consists of a specific number. For example:- if there are a total of 400 members, 201 out of 400 must be present.

Robert’s rules precisely convey or indicate that a Quorum refers to the least number of members (voting members) that must be present at the meeting that’s been conducted so as to conduct further business with the required efficiency. If we talk about Robert’s rules, it lays out basically four things one can do at the time of a meeting where the Quorum is found unavailable. They are as follows:-

1. Adjournment time may be decided or fixed.
2. Adjourn.
3. Recess.
4. Several other measures might be kept into consideration so as to assemble a Quorum with total accuracy.

Later, there was an updation made precisely in Robert’s Rules of Order. The newly revised one states that ‘the quorum set in an organization’s bylaws should approximate the largest number of members that can be relied upon to attend a meeting exception to which is the very bad weather or extremely unfavorable conditions.

Important fact

The Quorum precisely refers to the number of members present and not to the number of members voting.

Kinds of meetings

Let’s observe what are the different kinds of meetings:-

Kinds of meetings are:-

1. Directors

1. Board meeting.
2. Meeting of sub-committee of Directors.

2. Members

1. Statutory meetings.
2. Annual General meeting.
3. Class meeting.
4. Extraordinary General Meeting.

3. Creditors

1. Meeting of debenture holders.
2. Meeting of creditors.

Quorum Is considered to be as one of the prerequisites of valid meetings. Broadly speaking, the following are considered to be as the prerequisites of a valid meeting:-

1. appropriate authority
2. notice
3. quorum
4. agenda
5. chairman

Yes, Quorum should be definitely, without any doubt, be present throughout the meeting. However, there is a basic difference between the quorum of ‘public company’ and the quorums of ‘private company‘. The difference is that in the case of a public company there must be a minimum of five members personally present and entitled to vote whereas in the case of a private company there must be a minimum of two members present personally and entitled to vote. This shall be the quorum of a general meeting in both cases.

Can a single member constitute Quorum for the entire meeting?

The answer is a big NO.

Section. 97 and Section. 98 of The Companies Act 2013 deals with this matter stating:-

Section 97 of the Companies Act, 2013 provides the Tribunal with the power to call for an Annual General Meeting or we can say AGM. The section clearly indicates that if the default is made in conducting AGM, keeping in concern Section 96 of the Companies Act, 2013, the Tribunal literally possesses the power to call AGM or Annual General Meeting of the Company.

Section 98 concerns precisely with the power of the Tribunal to call meetings of the concerned members etc. There are basically in a total of 470 Sections out of which Section 98 is said to have been published in the official gazette on 12th of September, 2013.

What is the procedure if a Quorum is never formed?

It is of utmost importance to form a Quorum as it is considered to be as one of the main prerequisites to conduct a valid meeting. However, several steps can be taken if a Quorum is never formed. Some of them are as stated below:-

1. One can set an all-new meeting date, thereby, dismissing the actual or present meeting.
2. One can literally file a court petition to reduce quorums if needed.
3. One can just give the meeting an informal turn that does not take actual decisions and proceed with a general meeting instead.
4. One can wait for the members of the quorum to arrive.

[1] Reference :- Google.

[2] Reference :- Wikipedia.org

This Article is Authored by Mahima Mathur, 4th Year BA.LLB(HONS) Student Faculty of Law. The Maharaja Sayajirao University of Baroda.