Information

Formal authorization or expression of an action, decision, intention, opinion, transaction, etc. Proposition put before a meeting of stockholders (shareholders) or the directors of a firm for discussion, approval or adoption.

Resolutions are of two common types:

  1. Ordinary Resolution

    Act has been duly given and it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.

  2. Special Resolution

    As per Section 114 of Companies Act 2013, a resolution shall be a Special Resolution when—

    • the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution;
    • the notice required under this Act has been duly given; and
    • the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

Power Exercised by Passing Resolution at Board Meetings :-

  • Make calls on shareholders
  • Authorise the buyback of securities and shares
  • Issue securities and shares
  • Borrow monies
  • Investing the funds
  • Grant loans
  • Approve the financial statement
  • Approve amalgamation/merger
  • Diversify the business
  • Take over a company

In addition resolutions that can be passed at board meetings :-

  • Making political contributions
  • Appointing or removing key managerial personnel
  • IAppointing internal auditors and secretarial auditors

Importance of Drafting of Resolution :-

Drafting of resolutions is a difficult task and a function of a specialist. The secretary is supposed to be that specialist.

The wordings and the composition of sentences must be such that:

  • The correct intention is expressed.
  • There is no vagueness or ambiguity and
  • The meaning and purport of the resolution are understood in its true sense by the people concerned. Further, it has to be seen that
  • There is no scope for creating any complication by misinterpretation.
  • No lacuna or loophole shall be allowed to creep in.

Procedure of Drafting of Resolution :-

There is some technique or procedure to be adopted for drafting a resolution.

There are certain forms:

  • Either it may include some background on the basis of which the decision is taken, or not.
  • It is written in the past tense and indirect speech.
  • All the different points to be incorporated in a decision have to be enumerated first and then all are joined together in a systematic way.
  • Sometimes an addendum or a rider is added.

Documents / Information :-

  • Subject matter
  • Day, date, time, venue
  • Other related information
Information

Formal authorization or expression of an action, decision, intention, opinion, transaction, etc. Proposition put before a meeting of stockholders (shareholders) or the directors of a firm for discussion, approval or adoption.

Resolutions are of two common types:

  1. Ordinary Resolution

    Act has been duly given and it is required to be passed by the votes cast, whether on a show of hands, or electronically or on a poll, as the case may be, in favour of the resolution, including the casting vote, if any, of the Chairman, by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy or by postal ballot, exceed the votes, if any, cast against the resolution by members, so entitled and voting.

  2. Special Resolution

    As per Section 114 of Companies Act 2013, a resolution shall be a Special Resolution when—

    • the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution;
    • the notice required under this Act has been duly given; and
    • the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting.

Power Exercised by Passing Resolution at Board Meetings :-

  • Make calls on shareholders
  • Authorise the buyback of securities and shares
  • Issue securities and shares
  • Borrow monies
  • Investing the funds
  • Grant loans
  • Approve the financial statement
  • Approve amalgamation/merger
  • Diversify the business
  • Take over a company

In addition resolutions that can be passed at board meetings :-

  • Making political contributions
  • Appointing or removing key managerial personnel
  • IAppointing internal auditors and secretarial auditors
Importance of Drafting of Resolution :-

Drafting of resolutions is a difficult task and a function of a specialist. The secretary is supposed to be that specialist.

The wordings and the composition of sentences must be such that:

  • The correct intention is expressed.
  • There is no vagueness or ambiguity and
  • The meaning and purport of the resolution are understood in its true sense by the people concerned. Further, it has to be seen that
  • There is no scope for creating any complication by misinterpretation.
  • No lacuna or loophole shall be allowed to creep in.

There is some technique or procedure to be adopted for drafting a resolution.

There are certain forms:

  • Either it may include some background on the basis of which the decision is taken, or not.
  • It is written in the past tense and indirect speech.
  • All the different points to be incorporated in a decision have to be enumerated first and then all are joined together in a systematic way.
  • Sometimes an addendum or a rider is added.
  • Subject matter
  • Day, date, time, venue
  • Other related information