A quorum is basically what a joint stock company board meeting requires.
- More than half the members attend the meeting.
- A duly convened meeting
If the quorum has been met, the minutes of the board can state that the meeting is legal.
Legality and quorum are prerequisites to binding and accurate decisions at the meeting. More than a statement in the minutes is required to make the meeting legal or quorum. The board cannot decide on the quorum.
The Articles of Association and the Limited Liability Companies Act stipulate that the quorum of the board meeting must be determined. A shareholder can appeal against the decision if the board meets these requirements.
An article of association may specify a more stringent requirement for the quorum at a board meeting of a limited company.
A quorum for the board of a limited company requires that at least half the members be present at the meeting.
There may be an article in the articles that requires more members to attend. An entire board of directors may be required by the articles of association. However, the Articles of Association do not allow for an exemption from the attendance requirement.
The determination of the quorum
The number of members on the board will determine the method for calculating the quorum.
Articles of Association stipulate a fixed number of board members: An entire board refers to the number of board members defined in the papers.
The articles of association don’t specify how many members the board of directors should have, so the order of their members needs to be fixed. The quorum is determined then by the actual number of board members elected.
Even if a board member resigns or the board membership ceases, the method for calculating the quorum does not change.
The chairperson or vice-chairperson must be present.
A board meeting can be quorum even if the chairperson and vice-chairperson are absent.
The articles of association may contain a clause requiring the board’s presence or vice-chairperson to ensure a quorum at a board meeting.
Board member’s disability
A disabled member of the board cannot participate in decision-making. In calculating the board’s quorum, disabled board members can not be considered.
A board member who is disabled in a matter must have enough non-disabled members or alternates present at the meeting. The board cannot make decisions in any case that is affected because of the disability.
A disability of a board member could result in a meeting being unable to reach a majority. The general meeting must decide the matter in this instance.
The quorum is determined in the minutes of the board meetings.
It is common to indicate that the meeting was legal and that there is a quorum in the minutes of a board meeting. The chairman ensures that the forum is open and that there is a quorum.
Even though the meeting was declared legal and quorum, it is possible that there was a procedural error at the board meeting.
Appropriate meeting invitation
If all board members are not allowed to attend the meeting, the board will not be deemed a quorum.
Alternate board members must be invited to participate in any meeting if the original member cannot attend. The deputy member should be asked if the meeting chairperson discovers that the member cannot join in. A board member may have a personal deputy. The disabled member must inform the deputy.
The notice of the meeting is subject to a variety of formats. The invitation period must be sufficiently long to allow all board members to attend the meeting. A short notice period is possible if the urgent nature of the matter calls for a board meeting.
Checklist: Quorum of the board meeting of the limited company
If the board meeting of the limited corporation has a quorum, it is deemed a quorum.
- More than half the members attend the meeting.
- The meeting was convened on time. All board members have been allowed to attend the meeting.
- If there are substitute members on the board, they must be allowed to participate in case the member is not able to attend.
- When calculating the quorum, Disabled members were taken into consideration.
- The actual board members determine the quorum for a meeting.
