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CANCELLATION OF RESOLUTION

For cancellation of a Resolution, be it a Board Resolution or Resolution passed in General Meeting, there is no provision specified in the Companies Act, 2013. But sometimes circumstances arises where a resolution needs to be cancelled/ rescinded, the Board of Directors being responsible can take appropriate actions. A Board Resolution or Resolution passed in General Meeting can be cancelled by the Board or Members as the case may be.

Procedure for Cancellation of Board Resolution

  • A Board Resolution may be cancelled by passing a fresh Board Resolution for rescinding the earlier resolution (which is to be cancelled) in the subsequent Board Meeting.
  • The detail of the previous resolution like serial number of the meeting, date, time and venue of the meeting, Resolution number etc. is to be mentioned in the fresh resolution

Procedure for Cancellation of Resolution passed in General Meeting

  • The Board of Directors will approve the resolution of cancelling the earlier resolution (which is to be cancelled) and shall also call the EGM where the resolution for cancellation of earlier resolution will be proposed.
  • The General Meeting will be conducted and the members will consider and approve or reject the cancellation of the earlier resolution.
  • The detail of the previous resolution be mentioned in the fresh resolution like serial number of the meeting, date, time and venue of the meeting, Resolution number etc.

Draft Resolution for Cancellation of Board Resolution

The Chairman informed the Board that in the___(number of Meeting)____ Board Meeting held on ___(Date)___ at ___(venue)___, a resolution no. ___ was passed by the Board of Directors of the Company for _______.

The management recommends that the said resolution be rescinded as the same was passed based on the decision which was later cancelled due to unforeseen circumstances.

The Board considered the same and upon motion duly passed and seconded, it was:

“RESOLVED THAT the resolution no. ____ passed at the ___the Board Meeting held on ____(date)___ at __(venue)__ at ___(time)___ be and is hereby rescinded.”

Draft Resolution for Cancellation of Resolution passed at the General Meeting

“RESOLVED THAT the resolution no. ____ passed at the ___the AGM/EGM held on ____(date)___ at __(venue)__ at ___(time)___ be and is hereby rescinded.”

Explanatory Statement pursuant to Section 102 of the Companies Act, 2013

In the General Meeting held on ___(Date)___ at ___(venue)___, a resolution no. ___ was passed by the Board of Directors of the Company for _______, which is as under

“RESOLVED THAT ______________________”

The Board of Directors now recommends that the above resolution be rescinded. The said resolution was recommended to the Members because the Company was in process of ___and it was necessary for that purpose to obtain the approval of the members in advance. However, the earlier proposal is not under consideration anymore and has been cancelled in toto by other concerned parties.

Cancelling Resolution in the Same Meeting

It is here to be noted that a resolution cannot be cancelled in the same meeting.

If there is a situation that a resolution is approved and later on, in the same meeting the majority of the Directors dissent to it, then in the minutes of the meeting the dissent to that agenda will be noted and the resolution will not be passed.

Effect of Cancelling a Resolution

The cancellation of a resolution will have effect from the date on which it is cancelled. It cannot be cancelled with retrospective effect meaning that during the period the resolution was passed till the date on which resolution for cancellation was passed, the earlier resolution will be deemed to be valid for that period and the company will be responsible for the acts done by it or by others on the basis of that resolution.

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