Resolution by circulation and Resolution requiring special notice

Detail discussion about resolution by circulation and resolution requiring special notice given below:

Resolution by circulation

Resolution by circulation means passing a resolution by the Board without holding the meeting of the Board of Directors but by circulation of the resolution along with the supporting papers to all the directors for approval and signature.

Companies Act, 1994 provides that if it is not possible to hold a Board Meeting for some reason, the board may pass resolutions by circulation. The number of directors among whom it is circulated must not be less than the quorum fixed for Board Meeting.

But resolution by circulation cannot be made to fill casual vacancy of directors or to make calls on shares or obtain sanction to any contract in which any director has direct or indirect interest or to appoint a managing director or to invest company’s fund or to approve the appointment of a manger in more than two companies.

Resolution requiring special notice

The companies Act 1994, provides that where by any provisions contained in the Act or in the Articles of Association, special notice is required of any resolution, notice of the intention to move the resolution shall be given to the company not less than 14 days before the meeting at which it is to be moved.

The companies Act adds that the company shall, immediately after the notice of intention to move any such resolution has been received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting either by advertisement in a newspaper having an appropriate circulation or in any other mode allowed by the Articles not less than 7 days before the meeting.

The following are the resolutions, requiring such special notice as per the Companies Act, 1994.

  1. Resolution that the retiring auditors shall not be re-appointed.
  2. Resolution of the appointment of an auditor other than the retiring auditor.
  3. Removal of a Director before the expiry of his term
  4. Appointment of another person as a director in place of the director removed.

Resolution passed at adjourned meeting

The companies Act, 1994 provides that where a resolution is passed at an adjourned meeting of a company, the holders of any class of shares of a company or the Board of Directors of a company, the resolution shall, for all purposes, be treated as having been passed on the date on which it was in fact passed, and shall not be deemed to have been passed on any earlier date.

Registration of Resolution

The Companies Act, 1994 provides that all special resolutions and important resolutions must, within 30 days of their adoption, be registered with the Registered and also annexed to all copies of the Articles.

The Provision of the Act, is applicable to the following resolutions—

  1. All special resolutions.
  2. Resolutions agreed by all the members of the company.
  3. Resolution passed by the Board or agreement executed by a company relating to the appointment, reappointment or variation of the terms of appointment of a Managing Director.
  4. Resolutions passed by a company giving consent to the Board of any power relating to sale, lease etc.
  5. Resolution of the appointment of sole meeting of sole selling agent.

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