Approval, Disclosure & Passing of Resolution by the Directors 

• The Resolution is passed when it is approved by a majority of the Directors entitled to vote on the Resolution, unless not less than one-third of the total number of Directors for the time being require the Resolution under circulation to be decided at a Meeting [Clause 6.3.1 of SS_1]
• If any special majority or the affirmative vote of any particular Director or Directors is specified in the Articles, the Resolution shall be passed only with the assent of such special majority or such affirmative vote. [Clause 6.3.1 of SS_1]
• An Interested Director shall not be entitled to vote. For this purpose, a Director shall be treated as interested in a contract or arrangement entered or proposed to be entered into by the company:

(a) with any body corporate, if such Director, along with other Directors holds more than two percent of the paid-up share capital of that body corporate, or he is a promoter, or manager or chief executive officer of that body corporate; or

(b) with a firm or other entity, if such Director is a partner, owner or Member, as the case may be, of that firm or other entity [Clause 6.3.1 of SS_1]

• The Resolution, if passed, shall be deemed to have been passed on the earlier of: 

• • the last date specified for signifying assent or dissent by the Directors, or
  • the date on which assent has been received from the required majority, provided that on that date the number of Directors, who have not yet responded on the resolution under circulation, along with the Directors who have expressed their desire that the resolution under circulation be decided at a Meeting of the Board, shall not be one third or more of the total number of Directors; and shall be effective from that date, if no other effective date is specified in such Resolution. [Clause of 6.3.2 of SS-1] 

• Directors shall append the date on which they have signed the Resolution. In case a Director does not append a date, the date of receipt by the company of the signed Resolution shall be taken as the date of signing [Clause of 6.3.2 of SS-1] 
• Where the interest of a Director is yet to be communicated to the company, the concerned Director shall disclose his interest before the last date specified for the response and abstain from voting. [Clause of 6.3.2 of SS-1] 
• In case the Director does not respond on or before the last date specified for signifying assent or dissent, it shall be presumed that the Director has abstained from voting [Clause of 6.3.2 of SS-1] 
• If the approval of the majority of Directors entitled to vote is not received by the last date specified for receipt of such approval, the Resolution shall be considered as not passed. [Clause of 6.3.2 of SS-1] 

Post Circulation Requirements 

• Resolutions passed by circulation shall be noted at a subsequent Meeting of the Board and the text thereof with dissent or abstention, if any, shall be recorded in the Minutes of such Meeting. [Clause 6.4 of SS-1 & Clause 7.2.2.1 (i) of SS-1]
• Passing of Resolution by circulation shall be considered valid as if it had been passed at a duly convened Meeting of the Board. [Clause 6.5 of SS-1]

Illustrative list of items of business which shall not be passed by circulation and shall be placed before the Board at its Meeting (Annexure A) [Para 1.3.8 of SS1][read with Section 179(3) of Companies Act 2013 and Rule 8 of the Companies (Meeting of Board & its Powers) Rules, 2014 ]

General Business Items 

• Noting Minutes of Meetings of Audit Committee and other Committees. 

• Approving financial statements and the Board’s Report. 

• Considering the Compliance Certificate to ensure compliance with the provisions of all the laws applicable to the company. 

• Specifying list of laws applicable specifically to the company. 

• Appointment of Secretarial Auditors and Internal Auditors.

Specific Items 

• Borrowing money otherwise than by issue of debentures. 

• Investing the funds of the company. 

• Granting loans or giving guarantee or providing security in respect of loans. 

• Making political contributions. 

• Making calls on shareholders in respect of money unpaid on their shares. 

• Approving Remuneration of Managing Director, Whole-time Director and Manager.  

• Appointment or Removal of Key Managerial Personnel. 

• Appointment of a person as a Managing Director / Manager in more than one company. 

• Appointment of Director(s) in casual vacancy subject to the provisions in the Articles of the company. To be subsequently approved in the immediate next general meeting. 

• According sanction for related party transactions which are not in the ordinary course of business or which are not on arm’s length basis. 

• Sale of subsidiaries. 

• Purchase and Sale of material tangible/intangible assets not in the ordinary course of business. 

• Approve Payment to Director for loss of office. 

• Items arising out of separate Meeting of the Independent Directors if so decided by the Independent Directors. 

Corporate Actions 

• Authorise Buy Back of Securities. 

• Issue of securities, including debentures, whether in or outside India. 

• Approving amalgamation, merger or reconstruction. 

• Diversify the business. 

• Takeover another company or acquiring controlling orsubstantial stake in another company. 

Additional list of items in case of listed companies 

• Approving Annual operating plans and budgets. 

• Capital budgets and any updates. 

• Information on remuneration of Key Managerial Personnel. 

• Show cause, demand, prosecution notices and penalty notice which are materially important. 

• Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. 

• Any material default in financial obligations to and by the company, or substantial non-payment for goods sold by the company. 

• Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the company or taken an adverse view regarding another enterprise that can have negative implications on the company. 

• Details of any joint venture or collaboration agreement. 

• Transactions that involve substantial payment towards goodwill, brand equity, or intellectual property. 

• Significant labour problems and their proposed solutions. Any significant development in Human Resources/ Industrial Relations front like signing of wage agreement, implementation of Voluntary Retirement Scheme etc. 

• Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. 

• Non-compliance of any regulatory, statutory or listing requirements and shareholder services such as non-payment of dividend, delay in share transfer etc. 

Note: In case of section 8 company, following matters:

(i) to borrow monies;

(ii) to invest the funds of the company;

(iii) to grant loans or give guarantee or provide security in respect of loans;

may be decided by the Board by circulation instead of at a meeting. – Notification dated 5th june, 2015. [Section 179(3) of Companies Act 2013 and Rule 8 of the Companies (Meeting of Board & its Powers) Rules, 2014 ]