Section 175 of the Companies Act, 2013
Section 175 of the Companies Act, 2013 deals with the Passing of resolutions by circulation by the Board of Directors.
📜 Section 175 – Passing of Resolution by Circulation
This section provides a method for the Board of Directors or a committee of the Board to pass resolutions without holding a physical meeting, provided certain conditions are fulfilled.
🔹 Key Provisions:
Circulation of Draft Resolution:
A draft of the resolution, along with necessary papers, must be circulated to all directors (or committee members), at their:
Registered address in India by:
Hand delivery,
Post,
Courier, or
Electronic means (e-mail, etc.)
Approval by Majority:
The resolution is deemed passed if a majority of directors entitled to vote approve it in writing or by electronic mode.
Only those directors entitled to vote on the resolution will be counted.
Must be Noted in the Next Meeting:
Every resolution passed by circulation must be noted at the next Board meeting, and recorded in the minutes.
Matters Not Allowed by Circulation:
Certain matters (like approval of financial statements, Board's report, etc.) must be passed at a physical Board meeting and cannot be passed by circulation. These are specified in Section 179 read with Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014.
✅ Purpose:
To allow companies to take timely decisions without waiting for the next formal Board meeting, especially when the matter is urgent but straightforward.
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