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[Home](https://treelife.in) &gt; [Compliance](https://treelife.in/category/compliance/) &gt; Circular Resolution – Understanding Meaning, Process Structure

# Circular Resolution – Understanding Meaning, Process Structure

###### Written By

![Image](https://cdn.treelife.in/2024/09/Garima-Mitra.webp)![Image](https://cdn.treelife.in/2024/09/Sanmita-Poojari.webp)![Image](https://cdn.treelife.in/2025/01/Darshana-Chauhan.webp)

Garima Mitra, Sanmita Poojari, Darshana Chauhan

###### Published on

##### August 14,
2024

###### Last updated on

##### July 21, 2025
17:07

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 AI Summary

- Section 175 of the Companies Act, 2013 permits the Board of Directors to pass resolutions by circulation instead of convening a formal meeting.
- Circular resolutions are designed for urgent, time-sensitive matters that cannot wait for a scheduled board meeting.
- The draft resolution must be circulated to all directors at their addresses registered with the company in India, by hand delivery, post, or electronic means.
- A circular resolution is passed if approved by a majority of the directors entitled to vote on the matter.
- Directors who are interested in the subject matter of the resolution are excluded from the count of directors entitled to vote.
- Certain matters cannot be approved by circular resolution and must be decided at a duly convened board meeting.
- Exclusions from circular resolution include decisions on the issue of securities and the approval of financial statements.
- The circular resolution process offers a quicker and more efficient alternative to formal board meetings for routine or urgent approvals.
- Companies should maintain proper records of circulation and director responses to demonstrate compliance with Section 175.

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Circular resolutions, as per Section 175 of the Companies Act, 2013, allow the Board of Directors to make urgent decisions without formal meetings. This method is quick, efficient, and essential for time-sensitive matters.

Key Points:

1\. Process: Circulate the draft to all directors via hand delivery, post, or electronic means.
2\. Approval: Resolution passes with majority approval.
3\. Exclusions: Certain significant decisions like issuing securities or approving financial statements must be made in formal meetings.

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