Sunday, November 4, 2012


Appointing Additional Director in case of urgency- we can have circular resolution

Whether a company can Appoint an Additional Director through Circular Resolution ?


Unless the Articles of associaion of the company requires for appointment of Additional Director at Board meeting, he can be appointed by circular resolution. Companies Act, is silent on this issue.

Matters which can be approved by the circular resolution

All matter other than those which require shareholders' approval as contemplated in section 293 and other sections and matters which require approval of the Central Government, or the CLB/Tribunal or Regional Director can be passed by the directors or committee of directors by circular resolution. An illustrative list of matters which can be approved by the by passing circular resolution is given below:
(i) Opening a current account for the company with a bank;
(ii) Authorising the company secretary to file suits in civil courts on certain urgent matters;
(iii) Authorising on officer of the company to sign declaration forms;
(iv) Authorising for affixing common seal to a document the content of which have already been discussed and approved at a Board meeting;
(v) Authorising the managing director to fix the dates of closure of register of member/register of debentureholders;
(vi) Fixing 'record date' for rights or bonus issue or authorizing managing director for fixing the 'record date';
(vii) Changing the rate of interest payable on fixed deposits whenever the Government amends rule 3(c) of the Companies (Acceptance of Deposits) Rules, 1975;
(viii) Convening an extra ordinary general meeting on requisition of certain members;
(ix) Authorising on officer to make application for telex, fax and telephone connection for the company;
(x) Changing the registered office within the same town or city;
(xi) Appointing on Auditor in the casual vacancy caused by death of Auditors;
(xii) Appointing Additional Director in case of urgency;
(xiii) Appointing Alternate Director in case of urgency;
(xiv) Engaging a practising Company Secretary to issue compliance certificate contemplated by proviso to section 383A(1) of the Act;
(xv) Authorising an officer of the company to file criminal complaints in a Judicial Magistrate's Court for dishonour of cheque under section 138 of the Negotiable Instruments Act, 1881;
(xvi) Authorising the printing of share certificates;
(xvii) Appointment of Cost Auditors;
(xviii) Authorising Managing Director to sign the Listing Agreement with Stock exchange;
(xix) Nominating a director as occupier of a factory;
(xx) Forming subcommittees of thee Board, in case of urgency;
(xxi) Approving Transmission of shares before a Right Issue;
(xxii) Approving a mutual fund scheme by the Board of an Assets management company;
(xxiii) Authorising contribution to National Defence Fund;
(xiv) Making investment in the shares of Company's Employees Cooperative Credit society;
(xxv) Appointing the first Auditors within one month of incorporation of the company, in case the Board is unable to meet within a month from the date of incorporation of the company;
(xxvi) Fixing the date and time of an adjourned general meeting in case the adjourned general meeting is not desired to be held on the same day in the next week;
(xxvii) Appointing a representative of the company to represent the company in the general meeting of any other company;
(xxviii) Authorisation of the Board to keep company's books of account at a place other than the registered office

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