RESOLUTION- SYNOPSIS:
Being an Individuals, we are very well equipped with the skill of decision making. Right from choosing between the alternatives to selecting what is right or wrong, individual is solely responsible for his actions.
Similarly, the Company has to go through constant up-downs, viz-a-viz, change in regulatory framework, control, government policies, national and international affairs, and political pressure and it has to make correct choices with utmost care as its decision may have impact on number of people like employees, retailers, suppliers, consultants and numerous stakeholders.
Being an artificial person bearing separate legal entity, a company through its resolution takes its decision which though named as Company’s Resolution but in either way taken by individual or group of individuals having rational intellectual, knowledge and expertise.
COMPANY RESOLUTION:
In companies major decisions are taken by Board of Directors of the company at their respective Board Meeting, generally called as “Board Resolution”. But some decisions which have crucial impact on the organization and beyond the normal course of business requires the interference of Members of the company passed in Annual General Meeting or Extra-ordinary General meeting, named as “Ordinary Resolution” and “Special Resolution”.
WITHDRAWAL OF RESOLUTION:
The complete procedure to pass any resolution is stated in law and we have to follow it accordingly. But what about reversing the entire procedure? If a company is not willing to proceed with the passed resolution what is the procedure to be follow to withdraw that resolution?
First of all, it should be noted that Companies Act, 2013 or any other previous acts as far as concerned do not provide any specific provision in this regard. But the Board of Directors are saviors here, if such necessity arises the board is responsible to take appropriate actions.
HOW IT CAN BE WITHDRAWN?
1. Board Meeting Resolution
- Pass a fresh resolution in subsequent Board Meeting;
- Mention reference of earlier resolution e.g., Item number, Meeting Day & Date, agenda details, and Particulars of resolution;
- Specially mention the word “The earlier resolution is cancelled herewith”.
2. General Meeting Resolution:
- Firstly, Board of Directors will approve the cancellation of resolution in subsequent Board Meeting;
- The Board will call a fresh general meeting where the cancellation of resolution will be considered;
- Then in general meeting the mode may accept or reject the earlier resolution;
- Mention reference of earlier resolution e.g., Item number, Meeting Day & Date, agenda details, and Particulars of resolution;
FOLLOWING THINGS TO BE TAKEN INTO CONSIDERATION:
1. Resolution passed with malicious or fraudulent intention done to defraud concerned parties will not be allowed for cancellation by ROC or Tribunal.
2. The resolution cannot be withdrawn or rescinded in same Board or General Meeting
3. The fresh resolution passed at subsequent meeting will not have retrospective effect, it will come into effect from the date of passing the fresh rescinding resolution not from the earlier date.
RESOLUTION FORMAT WITH APPREHENSIVE EXAMPLE:
Suppose, ABC Company passed a resolution in Extra-ordinary General meeting dt. 2nd May, 2022 for Removal of Name of Company from Registrar of Company under section 248 of the Companies Act, 2013 and later decides to revert the decision then Board has to pass fresh resolution to rescind earlier resolution and call a general meeting to approve the fresh resolution. Forms have to be filed again with ROC to rectify the earlier resolution.
“RESOLVED THAT in suppression of the resolution passed earlier in the Extra-ordinary General Meeting of Members held on Monday 2 May, 2022, at Mumbai at 11.00 AM bearing resolution no. 05, the consent of the Members be and is hereby accorded to the Board of Directors to take the proposal for Removal of Name of Company from Registrar of Company under section 248 of the Companies Act, 2013 to be and hereby withdrawn with immediate effect.
RESOLVED FURTHER THAT any of the Directors of the Company are hereby individually and severally authorized to apply and submit such application and forms are authorized to sign, accept, execute, submit, deliver and undertake all the requisite documents, undertakings, agreements as required for rescinding the earlier resolution and do all such acts and execute all such documents as may require in connection with the subsequent resolution.”
Author Bio
Can a board resolution be withdrawn via a legal notice?