What is the board quorum under section 174?
Section 174 of the Companies Act, 2013 sets board quorum at one-third of total strength or two directors, whichever is higher. Video participation counts. A fraction rounds up to one.
In this guide
Section 174 sets board quorum at one-third of total strength or two directors, whichever is higher. A fraction rounds up to one, and vacant seats are left out of total strength. Video participation counts. If interested directors are two-thirds or more of the board, quorum is the disinterested directors present, not below two. A meeting that fails for want of quorum adjourns to the same day and time the next week, unless the articles say otherwise.
What is the section 174 quorum?
One-third of total strength, or two directors, whichever is higher. Section 174(1) of the Companies Act, 2013 sets that test for a meeting of the Board. The explanation says any fraction is rounded off as one, and total strength does not include directors whose places are vacant.
| Directors in office | One-third, rounded up | Quorum |
|---|---|---|
| 4 | 2 | 2 |
| 5 | 2 | 2 |
| 8 | 3 | 3 |
| 10 | 4 | 4 |
Drop vacant seats before you divide. Six sanctioned seats with two vacant is a total strength of 4, not 6. One-third of 4 rounds up to 2, so quorum is 2.
Do video calls count under section 174?
Yes. Section 174(1) says participation by video conferencing or other audio visual means is counted for quorum. The manner of that participation is prescribed under section 173. The section 173 board meetings guide covers notice and the matters that cannot be taken only on video.
Counting a video participant is not the same as ignoring a matter the Central Government has said must be dealt with in person. Quorum and the agenda item are separate tests. A director on video can make up the number. He cannot, by himself, clear an item the notification keeps off video.
When does section 174 drop interested directors?
When interested directors exceed or equal two-thirds of the total strength. Section 174(3) then sets quorum as the directors who are not interested and who are present, and that number shall not be less than two. An interested director, for this subsection, is a director within section 184(2). The section 184 disclosure is what tells you who that is.
On a board of six, four interested directors is exactly two-thirds. Quorum is then the two disinterested directors, and both have to be present. The four interested directors do not fill the gap.
When may an interested director still count?
A private company may count an interested director toward quorum after he discloses his interest under section 184. That exception is in the notification of 13 June 2017. It applies only if the company has not defaulted in filing financial statements under section 137 or the annual return under section 92.
A specified IFSC public company and a specified IFSC private company have a narrower exception, in G.S.R. 8(E) and G.S.R. 9(E) dated 4 January 2017. An interested director may participate if he discloses the interest before or at the meeting. That is not the private-company rule, and it is not the ordinary section 174(3) rule.
A section 8 company that has not defaulted on those same filings uses a different quorum under G.S.R. 466(E) dated 5 June 2015: eight members or 25 per cent of total strength, whichever is less, and not less than two members. Do not apply that substitution to a company that is not a section 8 company.
What if the board falls below quorum?
The remaining directors can do almost nothing. Section 174(2) lets continuing directors act despite a vacancy. Once their number is below the quorum fixed by the Act, they may act only to increase the number of directors to that quorum, or to summon a general meeting of the company, and for no other purpose.
A one-director One Person Company is outside this. The proviso to section 173(5) says section 174 does not apply to an OPC with only one director on its Board.
When does a section 174 meeting adjourn?
To the same day, time and place in the next week, unless the articles provide otherwise. Section 174(4) says a meeting that could not be held for want of quorum automatically stands adjourned on that pattern. If that day is a national holiday, it moves to the next succeeding day that is not a national holiday, at the same time and place.
The articles can set a different adjournment. If they are silent, do not invent a shorter gap or a new venue. The statute has already named the day, the time and the place.
Where is the section 174 quorum set?
In section 174, with the private-company and section 8 exceptions in MCA notifications rather than in the section itself. Read section 174 against the 13 June 2017 notification before you exclude an interested director of a private company, and watch the MCA updates feed when a filing default puts that company back on the ordinary rule.
Practical checks
Common questions
We have 8 directors and no vacancy. What is the quorum?
Three. One-third of 8 is 2.67, and section 174 rounds a fraction up to one, so that becomes 3. Two directors is the other limb. The higher figure is 3. Video participation counts toward that 3.
Two of our six seats are vacant. Do I divide by six?
No. Total strength does not include directors whose places are vacant. Six seats with two vacant is a total strength of 4. One-third of 4 is 1.33, which rounds up to 2. The other limb is also 2, so quorum is 2.
Four of our six directors are interested in the contract. Can they sit in the quorum?
Not on the ordinary rule. Four is two-thirds of six, so section 174(3) applies. Quorum is then the directors who are not interested and who are present, and that number cannot be less than two. Both disinterested directors have to be present. A private company that has not defaulted on its financial statements or annual return may count an interested director toward quorum after a section 184 disclosure. That exception is in the 13 June 2017 notification, not in section 174(3) itself.
Only one director is left. What can that director do?
Only two things. Section 174(2) says continuing directors may act despite a vacancy, but once their number is below the quorum fixed by the Act, they may act only to increase the number of directors up to that quorum, or to summon a general meeting. They cannot pass ordinary business.
The meeting failed for want of quorum on a Monday. When does it resume?
The same Monday the next week, at the same time and place, unless the articles provide otherwise. If that day is a national holiday, section 174(4) moves it to the next succeeding day that is not a national holiday, still at the same time and place.
Does section 174 apply to a one-person company with a single director?
No. The proviso to section 173(5) says section 174 does not apply to a One Person Company that has only one director on its Board. A one-director OPC does not have to manufacture a quorum of two.
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This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 27 September 2026.
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