Q.Sundari Ltd. is a public company with a Board of 12 directors. The company's Board wishes to pass a resolution to invest a large sum of the company's funds in another company's shares.

Investing company funds is treated as significant enough that it cannot be decided informally, and any Board Meeting deciding it must first satisfy the law's minimum-attendance requirement.

This problem involves applying two related provisions of the Companies Act, 2013 to Sundari Ltd.'s specific facts.

1. Nature of Board action required: Under Section 179, the power to invest the funds of the company is one of the specific powers that the Board of Directors can exercise only through a resolution passed at a meeting of the Board duly convened for the purpose — it cannot be decided informally, by circulation, or by an individual director acting alone, precisely because it involves committing the company's funds and therefore deserves full Board deliberation.
2. Quorum for the Board Meeting: Under Section 174, the quorum for any Board Meeting is one-third of the total strength of the Board, or two directors, whichever is higher. Sundari Ltd.'s Board has a total strength of 12 directors. One-third of 12 is exactly 4 directors. Comparing this to the alternative floor of 2 directors, 4 is the higher figure, so the quorum required for this Board Meeting is 4 directors. …

Alternative approach: compute both figures in the 'whichever is higher' test explicitly — one-third of 12 = 4; t …

A common mistake is applying the quorum formula only partially — e.g. stating the quorum is simply "2 directors" without first computing one-third of the actual …