resolution by circulation

Thus, no ‘resolution by circulation’ can be passed if the number of Directors then present in India is less than the number which is necessary to form the quorum had there been a meeting of the Board. Similarly, no ‘resolution by circulation’ can be passed by a Committee of Directors if at the relevant time the number of Directors present in India out of the total number of Directors forming the committee is less than the quorum fixed for the committee.
Since passing a resolution by circulation does not involve any meeting, neither any notice nor any agenda showing the items of the business is necessary. However, Section 289 requires that while sending the draft of the resolution necessary papers are also sent therewith. “Necessary Papers” would refer to those papers or documents which would explain the purpose of the resolution as also the urgency for passing the same by circulation.
PRACTICAL PROBLEMS
1. The Articles of Association of a company provide that the meeting of the Board of Directors ofthe company will be held on the last Friday of every month. The Secretary of the company as a result does not serve the notice to the individual Directors of the company. Consequently, a meeting of the Board of Directors was held on 23rd February, 1996. The meeting was attended by all the Directors with the exception of two Directors out of a total of 10 Directors and certain resolutions were passed. The two absentee Directors object to the meeting and the proceedings of the meeting for want of notice. Referring to the provisions of the Companies Act, 1956, decide:
(i) Whether the objection raised by the two absentee Directors is valid?
(ii) Would your answer be the same in case the Secretary of the company, instead
of sending notice on a usual format to the individual Directors, sent a copy of
the Articles of Association to each one of the Directors?
Period and form of notice. Section 286 does not specify any form of notice or period of notice. Usually, a week’s notice is considered sufficient. However, if the Articles provide that Board meetings will be held on fixed days of every month or where the directors are duly informed that in future all meetings of the Board will be held on a fixed day of every month (say, first Saturday of every month), it will be sufficient compliance with the statute-A Chettiar Firm V s. Kaleshwar Mills [1957] But, even where meetings are held on a fixed day of every month, a notice is usually sent to the Directors as a reminder.