Businesses to be transacted in the first Board Meeting post-incorporation
Section 173(1) of the Companies Act, 2013 states:
Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board:
Hence, the first board meeting after the incorporation of a company in India is an important one as it lays the foundation for the company's future operations. The following are some of the business that is typically conducted in the first board meeting:
Appointment of directors:
The first order of business is to appoint directors to the board of the company. The board should have a minimum of two directors and a maximum of fifteen. Directors appointed in a Board Meeting are termed as "Additional Directors" and they hold their offices till the upcoming Annual General Meeting of the Company.
Adoption of Articles of Association:
The Articles of Association is a document that lays down the rules and regulations that govern the company. The board must adopt the Articles of Association during the first board meeting.
Appointment of statutory auditors:
The board must appoint the first statutory auditors for the company. The auditors will be responsible for auditing the company's financial statements.
Opening of bank account:
The board must authorize the opening of a bank account in the name of the company. This account will be used for all financial transactions of the company.
Issuance of shares:
If the company has authorized capital, the board must issue shares to the subscribers. The board must also authorize the issue of share certificates to the subscribers.
Appointment of key managerial personnel:
The board must appoint,if needed, key managerial personnel such as the CEO, CFO, and company secretary.
Approval of initial contracts:
The board must approve any initial contracts that the company enters into, such as lease agreements or employment contracts.
Approval of initial transactions:
The board must approve any initial transactions that the company enters into, such as the purchase of assets or the provision of services.
Obtaining MBP-1 and DIR-8 from directors:
The board must obtain from directors their interest in other entities including body corporates in form MBP-1. Also directors should submit intimation of their disqualification in form DIR-8 in the first board meeting of the company.
Approval for Related Party Transactions:
The Board of Directors may provide a blanket approval for any related party transactions to be carried out during the conclusion of current financial year.
These are some of the important business that is typically conducted in the first board meeting after the incorporation of a company in India.
Disclaimer: This article is intended for educational and informational purpose only. It is recommended to seek the assistance of a Practising Company Secretary or consultant in India to complete all compliances applicable to your business.
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