Passing the Resolution by Circulation is an alternative method for urgent matters instead of convening the Physical Board Meeting. Resolution shall be considered as passed when approved by the majority of Directors.
As per the provisions of Section 175 of Companies Act, 2013, For passing the Resolution by Circulation, the resolution has to be circulated in draft with necessary papers, 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 electronic means(E-mail or fax) and has been approved by a majority of the directors or members, who are entitled to vote on the resolution.
Power: However if not less than 1/3rd of the total number of directors of the company 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.
1. Chapter 12,rule 8 of the companies (meeting of board and its powers) rules, 2014
2. Chapter 12, rule 4 of the companies (meeting of board and its powers)rules, 2014
The following matters shall not to be dealt with in a Meeting through Video Conferencing or Other Audio Visual Means:
3. Section 179(3) of Companies Act, 2013
(a) to make calls on shareholders in respect of money unpaid on their shares;
(b) to authorise buy-back of securities under section 68;
(c) to issue securities, including debentures, whether in or outside India;
(d) to borrow monies;
(e) to invest the funds of the company;
(f) to grant loans or give guarantee or provide security in respect of loans;]
(g) to approve financial statement and the Board’s report;
(h) to diversify the business of the company;
(i) to approve amalgamation, merger or reconstruction;
(j) to take over a company or acquire a controlling or substantial stake in another company;
4. Secretarial standard -1 ,annexure A
i. General Business Items
provisions of all the laws applicable to the company.
ii. Specific Items
iii. Corporate Actions
iv. Additional list of items in case of listed companies
Therefore Except the above mentioned Acts and including additional provision as per the Articles of Association of Company, all other Resolutions can be passed through Circulation.
1. Proposed Resolution to be passed should be sent in draft together with necessary papers to all Directors at postal address or email address registered with company. Every Resolution shall carry a serial Number
2. The same should be circulated by Hand, speed Post or by registered post, or by courier or by email or by any other recognized electronic mode.
3. Explanatory Note shall be given for each Business proposed to understand the meaning, scope and implications of the proposal.
4. If Interest of any Director arises through the matter shall be communicated. In cases where the interest of a Director is yet to be communicated to the company, the concerned Director shall disclose his interest before the last date specified for the response.
5. Procedure to give assent or dissent and Last date on which assent can be given shall be mentioned. Not more than 7 days shall be given to the Directors to respond, Additional 2 days is allowed in case of speed post/ by registered post/ or by courier.
6. If Majority assented, Resolution passed shall be noted by the Members present in the Next Board Meeting.
7. Passing of Resolution by circulation shall be considered valid as if it had been passed at a duly convened meeting of the Board.
1. If not less than one-third of the total number of directors of the company demands that resolution under circulation must be decided at a meeting, the responsibility arises of the Chairman to put that in the Meeting.
2. If approval of majority of Directors entitled to vote is not received by the last date specified for approval, the Resolution shall be considered as not passed.
FREQUENTLY ASKED QUESTIONS:
Q.1 Is Resolution along with Draft proposed to be circulated should be sent to Interested Directors also?
2. If Resolution along with Draft could not be sent through Email Id or Postal Address registered with Company or in absence of such details or any changes thereto?
Ans: Refer to any of the addresses appearing in DIN registration of the Director
3. For how long should the proof of sending and delivery of draft should be kept?
Ans: Not Less than 3 years