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There are various matters in a company that needs board of director’s approval by passing a board resolution. These matters need approval to verify whether the decisions are in the company’s favor or not before passing them. The Section 179, Sub-Section 3 of the Companies Act 2013, defines the matters which require board approval by passing a board resolution.
Now, let’s dig into a little deeper;
A resolution is a formal document that contains the decisions taken by the board of directors or the shareholders on behalf of the company. A board resolution is made during the Board of the Directors Meeting which generally is used to keep all the decisions made in a written form. Moreover, a company acts on these decisions after passing a board resolution.
A board meeting is held once in a half year in case of small companies and in a quarter of a year in case of companies other than that. In this meeting the company’s board members take decisions in the form of a resolution for the betterment of the company.
The functions of a board is to;
The Government of India has prescribed laws under Companies Act, 2013 to look upon the matters happening in a company. Also it is mandatory for every company to adhere these rules. According to these rules the number of board of directors should be seven and should not exceed this limit. Also in the case of stocks corporations, these corporations must stick to the rules directed by Securities and Exchange Board of India {SEBI}. The board members generally are;
The powers of the boards are bestowed upon the board as a whole and not individually.
Suggested Reads: Composition of Board of Directors, Companies Act 2013
The following matters need approval of the board by passing a resolution at the meeting of Board of Directors. This is specified under Section 179, Sub-Section 3 of The Companies Act[1];
The general format of the board resolution is given as under
The Indian Government has specified laws regarding every matter that takes place in a company under the Companies Act. This ensures that the functioning of the companies in India is in accordance with the prescribed laws. Some items/matters need the approval of the board of directors of the company and only after that, the company can take actions on the resolutions passed in the meeting.
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