Passing of a Board Resolution by Circulation under Companies Act, 1956
of India< >
< >
Provisions Applicable< >
< >
Section 289 read with Regulation 81 of Table A of Schedule I.
< >
< >
Provisions in Brief< >
< >
Whatever act is required to be done by the Board, unless the same is
specifically required to be done by calling a meeting of the Board (like the one
mentioned in section 292) may be done by the directors by passing a resolution
by circulation.
< >
< >
A resolution passed by circulation does not, however, dispense with
the need for holding a meeting once at least in three months, as is required
under section 285.
< >
< >
There is prohibition on a resolution being passed by circulation, if
the number of directors then present in India is less than the number which is
necessary to form the quorum, had there been a meeting of the Board or committee
of directors, as the case may be.
< >
< >
Procedure and Documentation< >
< >
1.The draft of the resolution, in duplicate, shall be circulated with
all necessary papers, if any, to all the directors then in India. In case of
directors who at that time are abroad, circulation has to be at their usual
address in India.< >
< >
2. This circular resolution is to be approved/disapproved by majority
of all the directors (if some of the directors are outside India, at the time of
circulation of the resolution, then majority of those in India can approve the
resolution provided that such majority is not less than the number of the
quorum) and return the duly signed copy to the company.< >
< >
3.A copy of the circular resolution shall be enclosed to the agenda of
the immediately next Board meeting mentioning in the notes that the said
resolution was voted for, or, against by so many number of directors and that it
was passed by majority of directors.< >
< >
4.While recording the minutes of the Board meeting, it must be ensured
that the whole of the resolution passed by circulation finds place in the
minutes of the Board meeting.< >
To,
< >
< >
Mr. ________
< >
(Address)
< >
Dated
< >
< >
Dear Sir/Madam,
< >
< >
I am sending herewith the following circular resolution for appointment
of Mr. _______________as an Additional Director on the Board of Directors of
_______________, in duplicate, which is intended to be passed as a resolution by
circulation as provided in section 289 of the Companies Act, 1956 read with
Article 152 of the Articles of Association of the Company, for your kind
consideration.
< >
< >
"RESOLVED THAT pursuant to the provisions of Section 260 of the
Companies Act, 1956 read with Article 154 of the Articles of Association of
Company Mr. ___________ be and is hereby appointed as an Additional Director of
the Company upto the date of commencement of the next annual general meeting of
the Company.
< >
< >
FURTHER RESOLVED THAT __________________of the Company be and are
hereby authorized to sign and execute all such documents, papers, etc. and to do
all such acts, deeds, matters and things to give effect to above resolution."
< >
< >
For Against< >
(Please
tick(Please
tick)
< >
.................................................
< >
Signature Signature
< >
< >
You are requested to return the duly signed duplicate copy of the same
at the registered office of the company within 7 days of this letter.
< >
< >
Yours faithfully,
< >
< >
For ________________________
< >
< >
< >
Company Secretary
< >
Date
< >
Note on appointment of Mr._________ as an Additional Director
< >
< >
I am glad to inform the members of the Board of Directors of the
Company that Mr._________, a prominent and leading personality of the Indian
Corporate Industry who has revolutionized the ________sector in India, has
accepted to become Director on the Board of Directors of the Company and
conveyed his consent to act as such vide his letter dated _______ which is
enclosed herewith for your consideration and noting.
< >
< >
In order to complete his appointment formalities it requires approval
of the Board of Directors of the company by way of passing a resolution. Since
approval of this business does not require holding of Board meeting in terms of
the Companies Act, 1956 and can be approved by way of passing of circular
resolution. Therefore, it will be convenient to complete his appointment
formalities by way of passing a circular resolution since deferring his
appointment formalities till next Board Meeting will not be in the best interest
of the Company.
< >
< >
The relevant papers and documents are attached herewith for your
consideration and action.
< >
< >
For
< >
< >
< >
< >
Company Secretary
< >
< >
Enclosed:< >
< >
a)Circular Resolution< >
< >
b)Consent Letter sent by Mr. __________< >
< >
< >
Note: The date of passing of resolution shall be the last
date when it is signed by all the directors required for the purpose of
approving the resolution.
< >
Disclaimer: The views expressed are personal of the author and are on the basis of law subsisting on the subject as on date and circulars issued by the regulatory authority and practice may not reflect the standard practice being followed on the matter and may not be acted upon or refrain from acting, upon the information contained hereinbefore. These are being shared for broad guidance only.
CAclubindia
