If a resolution is passed by circulation u/s. 289 of the Companies Act., then can it be considered as a physically held board meeting as required in accordance with Sec. 285 of the Companies Act.
10 Replies
Jaideep
(Service)
(1368 Points)
Replied 13 December 2010
No, not in any case, it is cleary provided in section 289 of the Companies Act. Section 285 has to complied seaprately. Also resolution passed by circulation has to be put in next board meeting as required under provisions of the said Act.
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 13 December 2010
Passing of resolutions under section 289 is not a substitute for Section 285. As per Section 285 physical meetings have to held in every 3 months and atleast 4 such meetings are to be held in every year.
Further section 292 lists out matters which can be considered only at Board meetings.
Illustrative matters to be passed at a duly convened Board Meeting and which cannot be passed by circulation
• 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.
• To accept fixed deposits and related matters.
Syam kamal
(Company Secretary)
(156 Points)
Replied 13 December 2010
Agree with Jaideep… Section 285 has to be complied separately. Further there are certain matters which can be transacted only at Board Meeting and not by circulation
Syam kamal
(Company Secretary)
(156 Points)
Replied 13 December 2010
| Originally posted by : Jayashree S Iyer | ||
 |
Passing of resolutions under section 289 is not a substitute for Section 285. As per Section 285 physical meetings have to held in every 3 months and atleast 4 such meetings are to be held in every year. Further section 292 lists out matters which can be considered only at Board meetings. Illustrative matters to be passed at a duly convened Board Meeting and which cannot be passed by circulation • 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. • To accept fixed deposits and related matters. |
 |
Yes , thanks for posing
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 13 December 2010
Hi
Resolution passed by circulation will not be treated as physically convened Board Meeting. The resolution passed by circulation will take not on the next Board Meeting held after passing of resolution by circulation and becomes the part of minutes.
Regards
Raman
(CS)
(33 Points)
Replied 14 December 2010
Section 292 of The Companies Act,1956 specifies that The Board of Directors of a company shall excercise certain powers on behalf of the company by means of resolutions passed at the meeting of the Board. These powers are specified u/s 292(1) (a) to (e) of the said section. The Resolution passed by Circulation u/s 289 of the Act have to be placed before next duly convened Board Meeting for confirmation by the Board.
CS LLB Pulkit Gupta
(https://www.facebook.com/pages/Life-and-Promises/553962034682487)
(16631 Points)
Replied 14 December 2010
| Originally posted by : Jaideep | ||
|
|
No, not in any case, it is cleary provided in section 289 of the Companies Act. Section 285 has to complied seaprately. Also resolution passed by circulation has to be put in next board meeting as required under provisions of the said Act. |
|
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 14 December 2010
Agree withe the views of the learned members....
Resolution by way of circulation, practically is needed when board meeting cannot be held or it is not expedient to held a board meeting and a decision of board by way of resolution is needed.
Moreover, the resoluion passed by circulation is also required to be placed before the next board meeting and should also form part of the minutes of the same.
Thus, circulation of resolution can not in any case be treated as physical board meeting.
Shreya A. Dhende
(Company Secretary)
(64 Points)
Replied 10 January 2011
Dear All,
Please let me know the procedure for passing resolution by circulation including compliance to stock exchanges?
Thanks in Advance
Jaideep
(Service)
(1368 Points)
Replied 10 January 2011
1.The draft of the resolution, in duplicate, shall be circulated with all necessary papers, if any, to all the directors then in India. In case of directors who at that time are abroad, circulation has to be at their usual address in India.
2. This circular resolution is to be approved/disapproved by majority of all the directors (if some of the directors are outside India, at the time of circulation of the resolution, then majority of those in India can approve the resolution provided that such majority is not less than the number of the quorum) and return the duly signed copy to the company.
3. A copy of the circular resolution shall be enclosed to the agenda of the immediately next Board meeting mentioning in the notes that the said resolution was voted for, or, against by so many number of directors and that it was passed by majority of directors.
4. While recording the minutes of the Board meeting, it must be ensured that the whole of the resolution passed by circulation finds place in the minutes of the Board meeting.
Draft Resolution:
To,
Mr. ________
(Address)
Dated
Dear Sir,
I am sending herewith the following circular resolution for _______________, in duplicate, which is intended to be passed as a resolution by circulation as provided in section 289 of the Companies Act, 1956 read with Article _______of the Articles of Association of the Company, for your kind consideration.
"RESOLVED THAT ......................................................."
For Against
(Please tick) (Please tick)
......................... .........................
Signature Signature
You are requested to return the duly signed duplicate copy of the same at the registered office of the company within 7 days of this letter.
Yours faithfully,
For ________________________
Company
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