Procedure For Passing of Resolution by Circulation


Procedure For Passing of Resolution by Circulation
Section 175 of Companies Act 2013 permits passing of resolution by the Directors by circulation, subject to the following conditions:—

(a)  Draft of the resolution should be circulated together with the necessary papers, if any, to all the directors or members of the committee, as the case may be, at their addresses registered with the company in India by hand delivery or by post or by courier, or through such electronic means as may be prescribed and has been approved by a majority of the directors or members, who are entitled to vote on the resolution.

(b) "Necessary papers" would refer to those papers or documents, which would explain the purpose of the resolution and the urgency for passing it by circulation. A brief note explaining the resolution has to be sent along with the draft resolution.

(c) Where not less than one-third of the total number of directors of the company for the time being require that any resolution under circulation must be decided at a meeting, the chairperson shall put the resolution to be decided at a meeting of the Board.
(d)  A resolution passed by circulation shall be noted at a subsequent meeting of the Board or the committee thereof, as the case may be, and made part of the minutes of such meeting.
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