What quorum means
A quorum is the minimum attendance a meeting needs before it can decide anything.
The purpose is to stop a small faction making decisions for everybody. If two directors out of seven could meet quietly and pass resolutions, the board would be meaningless.
Where a meeting proceeds without a quorum, the decisions taken are vulnerable. A shareholder or director who was excluded can challenge them, and that challenge is one of the first things a lawyer looks for in a company dispute.
How it is used
The number comes from the articles of association, subject to CAMA. It is checked at the start of the meeting and recorded in the minutes, which is why properly kept minutes begin by noting who attended and confirming a quorum was present.
If a quorum is not achieved, the meeting is normally adjourned rather than allowed to proceed, and the articles usually say what happens at the adjourned meeting.
Key features
- Minimum attendance required for a meeting to transact business
- Set by the articles of association within the framework of CAMA
- Different figures usually apply to board meetings and general meetings
- Should be recorded in the minutes at the start of the meeting
- Decisions taken without it are open to challenge
How this works in Nigeria
CAMA 2020 recognises single member companies, so quorum requirements adapt where there is only one member or one director. For companies with several owners, the articles govern.
The practical problem in Nigerian small companies is different from the technical one. Meetings often are not held at all, resolutions are signed later, and nobody records attendance. That works until there is a dispute, at which point the absence of any record makes every past decision arguable.
Quorum vs majority
Quorum is about who is in the room. Majority is about how many of them agreed.
A meeting can be quorate and still fail to pass a resolution because not enough of those present voted in favour. Equally, a resolution can be passed unanimously by people who did not form a quorum, and it is still vulnerable.
Both requirements have to be satisfied. Checking one and ignoring the other is a common way for decisions to be overturned later.
Limits and risks
A quorum guarantees attendance, not fairness. A meeting can be perfectly quorate and still be procedurally defective, for instance where proper notice was not given to everybody entitled to attend.
Quorum rules also cannot be used to obstruct indefinitely. Articles usually provide that at an adjourned meeting a lower threshold applies, precisely so that a minority cannot paralyse a company by refusing to show up.
Worth knowing
Record attendance and confirm the quorum in the minutes at the start of every meeting. It takes one line and it protects every decision that follows.