Circular Resolution

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(Querist)
15 November 2009

In respect of a private limited company what is circular resolution? How it is issues? Please enlighten with all the details?

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G V S Jagannadha Rao (Expert)
15 November 2009

A board of Directors of a Private Limited company discusses all issues in the Board meeting and the decisions taken in such meeting are recorded as resolutions. The resolutions are implemented by the Management.

Only decisions taken by Board with required Corum or quorum are valid.

When any issue which requires a decision of the Board crops up, a meeting of Directors is called for. Sometimes a required corum may not be there or the Directors may not be able to meet for some reason. If an urgent decision is required, the issue is circulated and the decision of the Directors is taken by circulation of the issue requiring decision. The resolution passed by the Directors on issue thus circulated is caled circular decision. I hope my explanation is clear to you.

raj kumar makkad (Expert)
15 November 2009

the opinion of GVS is pefect and I also go with this.

Gaurav Agarwal (Querist)
16 November 2009

Mr. Rao, thanks. How circular notice is distributed amongst Directors? Can email be used as a means to circulate notice to the Directors and their consent be taken by an email only.
Are email messages admissible in court of law?

adv. rajeev ( rajoo ) (Expert)
16 November 2009

I Agree with GVS. Yes email msgs are admissable in the court.

G V S Jagannadha Rao (Expert)
16 November 2009

An issue for resolution of the board can be circulated by email. The directors can give send their vote for or against the resolution by email. Once a resolution is made by majority decision, an extract of the same can be certified to be a true copy either by one of the Directors or the Company Secretary. That would suffice. The emails need not be produced in the Court and therefore the question of admissibility does not arise.

On a separate note, emails are admissible in evidence, after amendment of Evidence Act pursuant to passing of Information Technology Act.

Gaurav Agarwal (Querist)
16 November 2009

Thanks all the experts specially Mr. Rao.

Sachin Bhatia (Expert)
21 November 2009

Agree with Mr.Rao



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