PASSING A RESOLUTION IN DIRECTOR MEETING

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Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2011 A CO HAS PROVIDED IN ITS ARTICLE THAT AUTHORISED CAPITAL IS DIVIDED IN THREE PARTS REPRESENTED AS 'A' , 'B' AND 'C'. IT FURTHER PROVIDE THAT HOLDER OF 'A' CAPITAL WILL APPOINT TWO DIRECTOR AND SAME WAY HOLDER OF 'B' AND 'C ' CAPITAL WILL ALSO APPOINT TWO DIRECTOR EACH. IT FURTHER PROVIDE THAT IN A BOARD MEETING A RESOLUTION CAN BE PASSED WITH MAJORITY SUBJECT TO ONE AFFIRMATIVE VOTE OF EACH 'A' , 'B' AND 'C' DIRECTOR.

IF SUCH TYPE OF CLAUSES ARE VALID AND MEET THE REQUIREMENT OF COMPANIES ACT .

Manmohan ACA, CS

Manmohan ACA, CS (Expert)

05 January 2011 If it is a Private company - allowed

CS Taher

CS Taher (Expert)

05 January 2011 ALL UNLIMITED COMPANIES CANNOT INSERT THE ABOVE MENTIONED CLAUSES IN ARTICLE.
AS UNDER PROVISION OF SECTION 29 OF COMPANIES ACT ALL UNLIMITED COMPANIES ARE BOUND TO FOLLOW TABLES C,D,E OF SCHEDULE I WHILE DRAFTING ARTICLE.
THE SECTION IS SILENT ABOUT LIMITED COMPANIES, AND THERE IS NO SUCH RESTRICTION ABOUT DRAFTING OF ARTICLE OF A LIMITED COMPANY. WE CAN INCLUDE THE ABOVE MENTIONED CLAUSES IN ARTICLE OF A LIMITED COMPANY.

HOPE THE MATTER HELPS U, WAITING FOR OTHER EXPERTS OPINION.

Querist : Anonymous

Querist : Anonymous (Querist)

05 January 2011 NO IT IS A PUBLIC LIMITED COMPANY. WHERE IN 'A' SHAREHOLDER REPRESENT INDIAN PROMOTER , 'B' SHAREHOLDER REPRESENT FOREIGN COLLOBORATOR AND 'C' SHAREHOLDER ARE PUBLIC.

Jayashree S Iyer

Jayashree S Iyer (Expert)

06 January 2011 Both public and private companies can have such clauses in the articles. Companies Act doesn't provide for any such restrictions.

However, there may be some restrictions in case of listed companies as per listing provisions.

Experts please give your views.

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