What is a Quorum ?
Under Singapore’s Companies Act, the quorum—the minimum number of members required to conduct a valid meeting—is generally set at two members personally present, unless the company’s constitution specifies otherwise.
Under S179 of the Companies Act, the quorum for an EGM is 2 persons present unless the Articles of Association / Constitution provides otherwise. Any member elected by the members present at the meeting may be chairman.
The exception is where there is only a shareholder / member (individual or body corporate) in the Company.
If a quorum is not met for a meeting under the Companies Act, several key considerations and steps usually follow, depending on the type of meeting and the provisions in the company’s Constitution:
What Happens When Quorum Is Not Met?
Adjournment of the Meeting:
- Most company Constitutions allow for the adjournment of meetings if the required quorum is not met.
- The adjourned meeting may have specific requirements for notifying members of the new time and place, often set out in the company’s constitution.
- If the constitution does not provide specific rules, the Companies Act typically allows the chairman to adjourn the meeting.
Quorum at the Adjourned Meeting:
- In some cases, the Constitution may specify that at an adjourned meeting, those present (even if fewer than the initial quorum requirement) will constitute a quorum.
- This ensures that the meeting can proceed despite the lack of sufficient member turnout initially.
Invalid Decisions:
- If a meeting proceeds without the requisite quorum and makes decisions, those decisions may be deemed invalid.
- This can lead to disputes or legal challenges in the future, particularly for resolutions requiring statutory compliance, such as special or extraordinary resolutions.
Responsibility of the Chairperson:
- The chairperson of the meeting is typically responsible for verifying that the quorum is present before starting the meeting.
- If a quorum is not met, the chairperson should declare the meeting adjourned and note it in the minutes.
Notification Requirements:
- If an adjournment occurs, members must be notified in accordance with the company’s Constitution or applicable statutory requirements.
- Failure to provide proper notice can result in the invalidity of the reconvened meeting.
Costs and Delays:
- Adjournments due to lack of quorum can increase costs for the company and cause delays in decision-making.
- It is, therefore, common for companies to encourage members to attend meetings through reminders or proxy mechanisms.
What are the Preventive Measures to avoid a Quorum situation is not met ?
Companies may take the following measures to avoid a situation where the quorum is not met:
- Proxies: Encourage members to appoint proxies to represent them if they cannot attend
- Hybrid Meetings: Use modern technology to allow virtual attendance to increase member participation. For example, attendance at general meetings via electronic means, where permitted, shall count toward the quorum requirement, provided members or proxies are able to communicate and vote effectively.
- Constitutional Flexibility: Amend the Constitution to include provisions that allow a lower quorum for adjourned meetings or specific types of decisions
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