How to draft Resolution?

Sourabh Sharma (CS CA (Final) M.com NCFM Derivative Capital Market Mutual Funds)   (771 Points)

30 July 2009  

It is a general practice to start a resolution with the words “Resolved that………, but strictly speaking it is not compulsory. It denotes that the text of the resolution is decided formally.


If a resolution runs into paragraphs then it is conventional to split the resolution into different parts eg: “Resolved further that……..


Usually surplus or meaningless words are not included in the resolutions.


The language used should be direct and simple, because it is meant for reading by the common shareholders etc.


Reference to documents approved at a meeting should be included. For eg: Appointment of MD – Draft agreement.


Must indicate the relevant Section pursuant to which that resolution is passed eg: “Resolved that pursuant to Section……of the Companies Act 1956……… This is preferably be included in beginning part of the resolution. If more than one provision is hit then, include the words “and any other applicable provisions in the Companies Act, 1956”.


Approvals required for the resolution should be mentioned. For eg: subject to the approval of Central Government or subject to the confirmation of Company Law Board……….
With effect from date of the resolution may be indicated. For eg: Appointment of sole selling agent.


It is conventional to write a preamble to resolution. For eg:


Kind of meeting: Board/GeneralType of resolution: Simple/ordinary/special
Connecting words like, be and is hereby (denoting one concept) or be and are hereby (denoting more than one concept) is conventional. For eg: “Mr…….., director of the company be and is hereby appointed…….”


“Mr……. and Mr……. be and are hereby appointed…….”