06 December 2010
plz can anyone guide me on meeting by circulations. what is the procedure to be followed and how the directors should give their approval.
In case of resolution to be passed by circulation, send the draft of the resolution in duplicate along with the covering letter to all the Directors for the time being in India(not being less than the quroum for the meeting) to all other Directors at their address registered with the Company in India and requesting the Directors to accord their consent/disapproval in writing by ticking the respective option and return the paper within ---- days. The resolution should be approved either by all the Directors present in India or by a majority of Directors entitled to vote on the resolution.
The resolution passed by Circulation should be noted at the next Board Meeting and should be made a part of the minutes of the Board Meeting in which it is noted.
06 December 2010
Continuing with the above answer, a resolution passed by circulation is treated as if the same was passed at a duly convened Board Meeting......
07 December 2010
Resolutions can be passed by circulation following the procedure stipulated in Section 289 of the Companies Act, 1956 and explained in detail as above.
However there are certain powers which the Board shall exercise by means on resolutions passed at meetings of the Board only as stipulated in Section 292 and other sections of the Companies Act, 1956.
A gist of Certain Resolutions which need to be passed only at the Board Meeting and not by Circulation is given below:
• To make calls on shares in respect of unpaid share capital of the company
• To issue debentures.
• To borrow money otherwise than on debentures.
• To invest the funds of the company
• To give loans.
• To buy-back its own securities
• To make political contributions
• To fill casual vacancy in the Board.
• To sanction contracts in which a director is interested
• To make investment in shares of other companies.
• To make declaration of solvency with respect to voluntary winding up.
• To enter into joint venture and collaboration agreement.
• To commence a new business activity
• To approve mergers and acquisitions
• To shift the location of plant or factory or a registered office.
• To appoint or remove senior management personnel one level below the Board
• To appoint internal auditors and cost auditors.
• Adoption of Common Seal
• Forfeiture of shares.
• Granting loans to directors.
• Noting of directors’ interest.
• Noting of directors’ shareholdings.
• Appointment or resignation of Managing Director or whole-time director or Manager.
• Appointment of a Managing Director /Manager as a Managing Director/Manager in more than one company
• Appointment and removal of the Chief Financial Officer and the Company Secretary.
• Appointment of sole-selling agents.
• To approve quarterly, half-yearly and annual accounts and cost accounts.
• Annual operating plans and budgets.
• Any material default in financial obligations.
• Noting of statutory compliance reports, show cause notices, prosecutions and penalty notices of material nature.
• Sale of investments, subsidiaries or assets which is not in the normal course of business.
• Any issue which involves possible public or product liability claims.
• Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property.
• Foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movements.
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