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The resolution is passed when the last shareholder signs. A circulating resolution cannot be applied to a resolution to remove an auditor. The circulating resolution provision is not available to public companies where an actual shareholders meeting must be held.
For companies incorporated under Section 8 of the Act, the board of directors may decide the following matters by circular resolution (instead of meeting): to borrow monies. to invest the funds of the company. to grant loans or give guarantee or provide security in respect of loans.
A circular resolution is a documented resolution which is signed by a companys directors, with wording to signify they are in favour of the resolution.
Circular resolutions must be passed [unanimously/by a XX% majority2]. Circular resolutions should be used infrequently and only for matters that are urgent and do not require lengthy discussion by board members. If a lengthy discussion is required to support the decision, a board meeting should be convened.
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