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CAclubindiaNews:CircularResolutionWrittenResolution

CircularResolutionWrittenResolution

PassingofaBoardResolutionbyCirculationunderCompaniesAct,1956ofIndia

ProvisionsApplicable

Section289readwithRegulation81ofTableAofScheduleI.

ProvisionsinBrief

WhateveractisrequiredtobedonebytheBoard,unlessthesameisspecificallyrequiredtobedone
bycallingameetingoftheBoard(liketheonementionedinsection292)maybedonebythedirectors
bypassingaresolutionbycirculation.

Aresolutionpassedbycirculationdoesnot,however,dispensewiththeneedforholdingameeting
onceatleastinthreemonths,asisrequiredundersection285.

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
meetingoftheBoardorcommitteeofdirectors,asthecasemaybe.

ProcedureandDocumentation

1.Thedraftoftheresolution,induplicate,shallbecirculatedwithallnecessarypapers,ifany,toall
the directors then in India. In case of directors who at that time are abroad, circulation has to be at
theirusualaddressinIndia.

2.Thiscircularresolutionistobeapproved/disapprovedbymajorityofallthedirectors(ifsomeof
thedirectorsareoutsideIndia,atthetimeofcirculationoftheresolution,thenmajorityofthosein
India can approve the resolution provided that such majority is not less than the number of the
quorum)andreturnthedulysignedcopytothecompany.

3.A copy of the circular resolution shall be enclosed to the agenda of the immediately next Board
meetingmentioninginthenotesthatthesaidresolutionwasvotedfor,or,againstbysomanynumber
ofdirectorsandthatitwaspassedbymajorityofdirectors.

4. While recording the minutes of the Board meeting, it must be ensured that the whole of the
resolutionpassedbycirculationfindsplaceintheminutesoftheBoardmeeting.

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To,

Mr.________
(Address)
Dated

DearSir/Madam,

IamsendingherewiththefollowingcircularresolutionforappointmentofMr._______________as
an Additional Director on the Board of Directors of _______________, in duplicate, which is
intendedtobepassedasaresolutionbycirculationasprovidedinsection289oftheCompaniesAct,
1956 read with Article 152 of the Articles of Association of the Company, for your kind
consideration.

"RESOLVEDTHATpursuanttotheprovisionsofSection260oftheCompaniesAct,1956readwith
Article154oftheArticlesofAssociationofCompanyMr.___________beandisherebyappointed
asanAdditionalDirectoroftheCompanyuptothedateofcommencementofthenextannualgeneral
meetingoftheCompany.

FURTHERRESOLVEDTHAT__________________oftheCompanybeandareherebyauthorized
tosignandexecuteallsuchdocuments,papers,etc.andtodoallsuchacts,deeds,mattersandthings
togiveeffecttoaboveresolution."

ForAgainst
(Pleasetick)(Pleasetick)
..................................................
SignatureSignature

Youarerequestedtoreturnthedulysignedduplicatecopyofthesameattheregisteredofficeofthe
companywithin7daysofthisletter.

Yoursfaithfully,

For________________________

CompanySecretary

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Date
NoteonappointmentofMr._________asanAdditionalDirector

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
________sectorinIndia,hasacceptedtobecomeDirectorontheBoardofDirectorsoftheCompany
andconveyedhisconsenttoactassuchvidehisletterdated_______whichisenclosedherewithfor
yourconsiderationandnoting.

InordertocompletehisappointmentformalitiesitrequiresapprovaloftheBoardofDirectorsofthe
companybywayofpassingaresolution.Sinceapprovalofthisbusinessdoesnotrequireholdingof
Board meeting in terms of the Companies Act, 1956 and can be approved by way of passing of
circularresolution.Therefore,itwillbeconvenienttocompletehisappointmentformalitiesbywayof
passingacircularresolutionsincedeferringhisappointmentformalitiestillnextBoardMeetingwill
notbeinthebestinterestoftheCompany.

Therelevantpapersanddocumentsareattachedherewithforyourconsiderationandaction.

For

CompanySecretary

Enclosed:

a)CircularResolution

b)ConsentLettersentbyMr.__________

Note:Thedateofpassingofresolutionshallbethelastdatewhenitissignedbyallthedirectors
requiredforthepurposeofapprovingtheresolution.

Disclaimer:Theviewsexpressedarepersonaloftheauthorandareonthebasisoflaw
subsistingonthesubjectasondateandcircularsissuedbytheregulatoryauthorityand
practicemaynotreflectthestandardpracticebeingfollowedonthematterandmaynotbe
acteduponorrefrainfromacting,upontheinformationcontainedhereinbefore.Theseare
beingsharedforbroadguidanceonly.

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Source:SubsistingCompanyLawandExperience

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