Section 175: Passing of resolution by circulation
This section sets out the rules for passing company resolutions by circulation outside of meetings.
The section, clause by clause
What the section says
In plain terms
(1)No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or members of the committee, as the case may be, at their addresses registered with the company in India by hand delivery or by post or by courier, or through such electronic means as may be prescribed and has been approved by a majority of the directors or members, who are entitled to vote on the resolution:
A resolution passed by the Board or a committee by circulation is valid only if it is sent to all directors at their registered India address by hand, post, courier, or prescribed electronic means and approved by a majority of voting directors, unless at least one-third of directors want it decided at a meeting.
provisoProvided that, where not less than one-third of the total number of directors of the company for the time being require that any resolution under circulation must be decided at a meeting, the chairperson shall put the resolution to be decided at a meeting of the Board.
(2)A resolution under sub-section (1) shall be noted at a subsequent meeting of the Board or the committee thereof, as the case may be, and made part of the minutes of such meeting.
Any resolution passed by circulation must be recorded at the next Board or committee meeting and included in the meeting minutes.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Subs. by Act 1 of 2018, s. 57, for “every listed company” (w.e.f. 7-5-2018).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.