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Circular Resolution Written Resolution

Vivek Sethia 
Updated on 01 August 2020

LinkedIn


Passing of a Board Resolution by Circulation under Companies Act, 1956 of India< >

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Provisions Applicable< >

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Section 289 read with Regulation 81 of Table A of Schedule I.

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Provisions in Brief< >

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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.

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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.

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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.

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Procedure and Documentation< >

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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.< >

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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.< >

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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.< >

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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,

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Mr. ________

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(Address)

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Dated

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Dear Sir/Madam,

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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.

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"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.

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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."

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For Against< >

(Please tick(Please tick)

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.................................................

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Signature Signature

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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.

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Yours faithfully,

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For ________________________

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Company Secretary

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Date

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Note on appointment of Mr._________ as an Additional Director

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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.

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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.

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The relevant papers and documents are attached herewith for your consideration and action.

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For

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Company Secretary

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Enclosed:< >

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a)Circular Resolution< >

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b)Consent Letter sent by Mr. __________< >

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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.

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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.




Category Corporate Law
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