CIRCULAR RESOLUTION

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Gargi Ranade (Querist)

31 March 2009 Please some body help me ! I want to pass circular resolution for authorising one of the dire ctor to issue shares on behalf of BOD, Idont know what should be format of the circular resolution what are all other documents I need to attach for passing this resolution I can pass resolution but dont know procedure for circular resolution is it require to give details expl. regarding matter along with the resolution
its urgent please help me

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)

31 March 2009 circular resolution :

A meeting by circular resolution does not require the physical presence of the participants in the meeting. Rather, someone draws up the proposed minutes of the meeting, including the resolutions proposed to be adopted, and circularizes the minutes to the participants for the signature of each.

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)

31 March 2009 So it format does not differ much from general resolutions.

CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)

31 March 2009 Procedure to pass the resolution by circulation is as under:

1.Draft resolution should be duly circulated to all the directors, who are then in India, at their usual residential address in India ( not being less in no. as fixed for the quorum of the meeting);

2. Necessary papers, if any, should be attached along with the draft resolution;

3. The resolution should be approved by majority directors;

4. Approved resolution should be duly incorporated in the board minutes of the next meeting,

Thanks,
CS Siddhartha Banik

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)

31 March 2009
Eventhough companies act allows for passing the resolution by circular I am drawing your attention to Section 292 of the companies act - Certain powers to be excercised by the Board only at the Board meeting. Since issue of shares is a important subject it should be passed in the Board meeting and not by circluation.

CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)

31 March 2009 Sec.292 does not cover 'Issue of Shares'.

However, i agree that it is an important decision.

Thanks,
CS Siddhartha Banik

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