The most important and basic work for a Company Secretary during their Internship or Job is to draft a RESOLUTION. This is the term we heard on a very frequent basis from our Bosses. The word RESOLUTION may sound very basic. But to draft, we must have a basic knowledge for the same.
So, let’s discuss some points related with the RESOLUTIONS:-
Meaning of Resolution:- It’s simply a firm decision to do or not to do something. It can be broadly categorized in two types i.e. Board Resolution & Shareholders Resolution.
Board Resolution:- Any important decisions taken by the Board of Directors of the Company in Board Meeting and in writing is known as Board Resolution. It’s a Formal and a Legal document binding on the Company.
Shareholder’s Resolution:- Any important decisions taken by the Shareholders of the Company in General Meeting and in writing is known as Board Resolution. It’s a Formal and a Legal document binding on the Company.
Any kind of resolution passed by the Company for the smooth functioning of the business should be drafted on the Letterhead of the Company. The resolutions drafted without the Letterhead of the company should not be treated as a valid document.
The resolution should always start with “RESOLVED THAT” in bold letters.
Important points to be entered in Resolutions:-
The resolution should always contain the following points:-
a. Number of Meeting (i.e. 1st or 2nd etc.)
b. Name of the Company
c. Date, Time and FY of the Meeting
d. Address where the meeting is held
e. Must specify is it Board Meeting or General Meeting
An Example to give clarity to the above points:-
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE SEVENTH MEETING OF THE BOARD OF DIRECTORS FOR THE FY 2018-19 OF (NAME OF COMPANY) HELD AT THE (ADDRESS) ON (DATE) AT (TIME).
Similarly can be drafted for the Shareholders Resolution.
One Meeting Various Resolutions:-
Yes, we can absolutely convene Single Meeting (i.e. Board or General) and pass various resolutions required by the company on such particular date.
The points to be kept in mind while doing this are, the resolutions should be divided by their particular ITEM No.
Date of Meeting – 30/03/2021
Business Transacted – Approval of Loan from HDFC Bank & Appointment of Director
So, the resolution will be drafted in the following manner:-
ITEM No. 1
Approval of Loan from HDFC Bank
(And pass the required resolution)
ITEM No. 2
Appointment of Director
(And pass the required resolution)
Signing of Resolutions:-
The resolution must be signed by the Board of Directors of the Company or Company Secretary of the company.
The details like Designation, DIN in case of BOD and Membership No. in case of CS along with the registered address of the person signing the resolution should be present.
Recording of Resolutions:-
The Board Resolutions passed by the Company during a particular financial year should be recorded in the Board Meeting Minutes Book of the Company.
Similarly the Shareholders Resolution should be recorded in the General Meeting Minutes Book of the Company.
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This article is based on the best of my knowledge and moreover in no event author shall be liable for any direct or indirect result from this article. This will only be treated as a knowledge sharing initiative provided solely for information. This article does not guarantee a professional advice or recommendation.