The draft of the Resolution to be passed and the necessary papers shall be circulated amongst the Directors by hand, or by speed post or by registered post or by courier, or by e-mail or by any other recognised electronic means. In case of Directors residing abroad, the draft Resolution and the necessary papers may be sent by e-mail or any other recognized electronic means. Proof of sending and delivery of the draft of the Resolution and the necessary papers shall be maintained by the company for such period as decided by the Board, which shall not be less than three years from the date of the Meeting.
Notice and Agenda are not necessary for passing of a Resolution by circulation. However, necessary papers which explain the purpose of the Resolution should be sent along with the draft Resolution to all the Directors, or in the case of a Committee, to all the members of the Committee. It would be advisable to also explain the reasons as to why approval is sought by circulation.
Not more than seven days from the date of circulation of the draft of the Resolution shall be given to the Directors to respond and the last date shall be computed accordingly. Depending upon the necessity and urgency , the company may give seven days or less time for responding to the proposal. The Resolution, if passed, shall be deemed to have been passed on the earlier of:. Company XYZ has 9 Directors. It circulated a Resolution on 1st May among the Directors and requested them to respond on or before 8th May.
In this case, the Resolution would be carried through since 7 Directors forming majority have assented. In this case, the Resolution would be passed since 6 Directors forming majority have approved. The date for passing the Resolution shall be deemed to be 5th May since the eventuality of at least 3 Directors i. Directors shall signify their assent or dissent by signing the Resolution to be passed by circulation or by e-mail or any other electronic means.
Resolutions passed by circulation shall be noted at a subsequent Meeting of the Board and the text thereof with dissent or abstention, if any, shall be recorded in the Minutes of such Meeting. Passing of Resolution by circulation shall be considered valid as if it had been passed at a duly convened Meeting of the Board.
The following Resolution is intended to be passed by circulation as per the provisions of Section of the Companies Act, A note explaining the urgency and necessity for passing the said Resolution by circulation and the supporting papers if any are enclosed.
None of the Directors are deemed to be concerned or interested in the Resolution. Kindly indicate your response to the aforesaid Resolution, by appending your signature and the date of signing in the space provided beneath the Resolution and return one copy to the undersigned or by e-mail at the address mentioned below so as to reach us on or before……………………………………………. Name of Company. Your email address will not be published.
Post Comment. Notice: It seems you have Javascript disabled in your Browser. In order to submit a comment to this post, please write this code along with your comment: 73e2dcc13eb1edc61daaf. User Menu. Company Law Articles. Resolution by circulation under Companies Act read with SS Authority The Chairman of the Board or in his absence, the Managing Director or in their absence, any Director other than an Interested Director, shall decide, before the draft Resolution is circulated to all the Directors, whether the approval of the Board for a particular business shall be obtained by means of a Resolution by circulation.
Resolutions: Every resolution shall be passed by the circulation except the following resolutions: General Business Items Noting Minutes of Meetings of Audit Committee and other Committees. Considering the Compliance Certificate to ensure compliance with the provisions of all the laws applicable to the company. Specifying list of laws applicable specifically to the company.
Appointment of Secretarial Auditors and Internal Auditors. Specific Items Borrowing money otherwise than by issue of debentures. Investing the funds of the company. Granting loans or giving guarantee or providing security in respect of loans Making political contributions.
Making calls on shareholders in respect of money unpaid on their shares. Notify me of follow-up comments by email. Notify me of new posts by email. This site uses Akismet to reduce spam. Learn how your comment data is processed. Skip to content. Versha Mittal Oct 16, I regularly read blog related to Compliance and it really helps. Join the discussion Cancel reply Your email address will not be published. Comment Name Email Website Save my name, email, and website in this browser for the next time I comment.
Popular on scc online blog. When is not feasible to call Board Meeting and approval of Directors is required on an urgent basis. In such cases, resolution can be passed through Circulation. As per Section of the Companies Act, read with Rule 5 of Companies Meeting of the Board and its Powers Rules, and Secretarial Standards-1 issued by the Institute of Company Secretaries of India, the Company to pass a resolution by circulation without convening a Board meeting or a Committee meeting, as the case may be.
Draft resolution to be circulated. In order to pass a resolution by circulation, the draft of the resolution proposed to be passed along with the necessary documents if any, shall be circulated to all the directors of the Company or the members of the committee of the Company.
The resolution shall be deemed to be passed if approved by majority of the directors entitled to vote on the resolution. Here interested Director cannot vote on such resolution.
In case a Director does not respond before last date of responding it shall be presumed that he has abstained from voting. Effective Date of the passing of the resolution. The note shall also indicate how directors of the Company or the members of the committee of the Company, as the case may be, shall signify assent or dissent to the Resolution proposed and the date by which the directors of the Company or the members of the committee of the Company, as the case may be, shall respond.
The resolution which is passed by circulation shall be taken note in the subsequent meeting of the Board or Committee, as the case may be, and shall form the part of minutes of such subsequent meeting.
Passing of Resolution by circulation shall be considered valid as if it had been passed at a duly convened Meeting of the Board.
Each business proposed to be passed by way of Resolution by circulation shall be explained by a note setting out the details of the proposal, relevant material facts that enable the Directors to understand the meaning, scope and implications of the proposal, the nature of concern or interest, if any, of any Director in the proposal, which the Director had earlier disclosed and the draft of the Resolution proposed.
The note shall also indicate how a Director shall signify assent or dissent to the Resolution proposed and the date by which the Director shall respond. The following are the list of matters which are to be passed only at a duly convened Board meeting and not by circulation:. Additional list of items in case of listed companies.
This is with reference to passing of following resolution by Circulation as per the provisions of Section of the Companies Act, read with the Rules prescribed thereunder.
A brief note containing the details of the proposal is as under:. None of the Director is in any way concerned or interested in this resolution. The Board is requested to consider and pass the following resolution by Circulation:. I mportant Provisions relating to Circular Resolution:. If any director gives dissent on a circular resolution.
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