When can the Board pass a circular resolution?
Section 175 passes a board resolution by circulation only if every director gets the draft at the India address on the register and a majority of those entitled to vote approve it. Section 179(3) and rule 8 stay with a meeting.
In this guide
Section 175 of the Companies Act, 2013 passes a circulated board resolution only when the draft and papers reach every director at the India address on the company's register, and a majority of directors entitled to vote approve it. Hand, post, courier, e-mail or fax will do. Not less than one-third of the directors can force a meeting. Section 179(3) and rule 8 powers cannot pass by circulation.
What makes a section 175 resolution valid?
Section 175(1) of the Companies Act, 2013 deems a circulated resolution duly passed only if the draft and the necessary papers went to every director, or every committee member, at the address registered with the company in India, and a majority of those entitled to vote approved it. Missing either condition means the resolution was not duly passed by circulation.
The permitted routes are hand delivery, post, courier, or such electronic means as may be prescribed. Rule 5 of the Companies (Meetings of Board and its Powers) Rules, 2014 says those electronic means may include e-mail or fax. A director who was left off the circulation breaks the section, even if the others would have been a majority on their own.
The majority is of the directors entitled to vote, not of the directors who happened to reply. Silence is not an approval. If five directors are entitled to vote, three must approve. Two yes replies and three blanks do not pass. Who is not entitled to vote is a section 184 question. Section 175 does not restate it.
Which powers cannot pass by circulation?
Section 179(3) powers and the surviving rule 8 powers cannot pass by circulation. Section 179(3) says those powers shall be exercised by the Board only by resolutions passed at meetings. A circulation under section 175 does not become one of those meetings because every director replied.
| Power | Why circulation fails |
|---|---|
| Make calls on shares | Section 179(3) |
| Authorise a buyback | Section 179(3), read with section 68 |
| Issue securities, including debentures | Section 179(3) |
| Borrow, invest, or grant loans or guarantees | Section 179(3). Delegation itself needs a meeting |
| Approve financial statements and the board report | Section 179(3) |
| Diversify, amalgamate, or take a controlling stake | Section 179(3) |
| Political contributions | Rule 8, still in force |
| Appoint or remove key managerial personnel | Rule 8, still in force |
| Appoint internal auditors and the secretarial auditor | Rule 8, still in force |
Rule 8used to be longer. G.S.R. 206(E) dated 18 March 2015 omitted the items on noting appointments one level below KMP, noting a director's interest, buying or selling investments of 5% or more of the investee's paid-up capital and free reserves, inviting or renewing public deposits, changing deposit terms, and approving quarterly, half-yearly and annual financial results. Those omissions do not move section 179(3) onto the circulation route. Financial statements and the board report are still a meeting item under the Act, whatever happened to the old rule 8 line on results.
When must circulation go to a meeting?
Circulation under section 175 must go to a board meeting when not less than one-third of the directors, for the time being, require it. The proviso to section 175(1) says the chairperson shall then put the resolution to be decided at a meeting of the Board. The fraction is of the total number of directors, not of the directors entitled to vote, and not of the directors who have already replied.
On a board of six, one-third is two. Two directors can force the meeting. On a board of five, one-third is more than one, so one director is short and two are enough. Section 175 does not say that a fraction rounds up. Section 174 does, for quorum. Do not copy that sentence across.
How is a circular resolution recorded?
A section 175 resolution is noted at the next board or committee meeting and made part of those minutes. Section 175(2) says a resolution under subsection (1) shall be noted at a subsequent meeting of the Board or the committee, and made part of the minutes of that meeting. The note is not a second vote. It is the record the section requires after the approvals are in.
Keep the draft, the proof of delivery to each registered India address, and the approvals with the minute papers. A later reader should be able to see that every director was sent the papers, and that the yes votes were a majority of those entitled to vote. A board resolution that cannot show that trail was not passed in the way section 175 describes.
What penalty follows a bad circulation?
A bad circulation under section 175 draws the section 450 penalty of ₹10,000, because section 175 states no penalty of its own. A resolution that misses the draft, the delivery, or the majority is not deemed duly passed. Where the Act gives no other penalty for a contravention, section 450, as substituted from 21 December 2020, also adds ₹1,000 for each day after the first if the contravention continues, subject to a maximum of ₹2 lakh for a company and ₹50,000 for an officer in default or any other person.
The older fine wording in section 450 was replaced by that penalty. Do not quote the pre-2020 fine in a notice. A change to rule 5 or rule 8 shows up as an MCA notification. Track it on the MCA updates feed before you reuse a circulation checklist from 2014.
Practical checks
Common questions
Three of our five directors replied yes on email. Is that enough?
Yes, if all five were entitled to vote and each of them was sent the draft at the India address on the company's register. Section 175 needs approval by a majority of the directors entitled to vote, not a majority of the replies. Three out of five entitled directors is a majority. Two out of five is not, even if the other three stayed silent.
Can we pass a buyback by WhatsApp?
No. Authorising a buyback under section 68 is a section 179(3) power, so it has to be a resolution at a board meeting. Section 175 does not apply to it. Even for a power that can circulate, rule 5 names e-mail or fax. It does not name a messaging app.
Two directors on a board of five want this taken at a meeting. Can they force it?
Yes. One-third of five is more than one and less than two. Section 175 asks for not less than one-third of the total number of directors for the time being. One director is below that fraction. Two are not. The section does not contain the rounding sentence in section 174, so do not borrow that rule.
We circulated the appointment of a whole-time director. Does section 175 save it?
No. Appointing or removing key managerial personnel is still in rule 8 of the Companies (Meetings of Board and its Powers) Rules, 2014. That power is exercised only by a resolution passed at a board meeting. A stack of approval emails is not that meeting.
The resolution passed, but we never noted it in the next minutes. Is it invalid?
Section 175(1) decides whether it was duly passed. Section 175(2) is a separate duty: the resolution shall be noted at a subsequent board or committee meeting and made part of those minutes. Skipping the note does not, on these words, unmake an approval that already met subsection (1). It is still a breach of subsection (2).
What is the fine if we treat a meeting-only power as circulated?
Section 175 has no penalty of its own. Section 450, as substituted from 21 December 2020, sets a penalty of ₹10,000 where the Act states no other penalty, plus ₹1,000 for each day after the first if the contravention continues, capped at ₹2 lakh for the company and ₹50,000 for an officer in default or any other person. The circular resolution is also not a duly passed resolution under section 175(1).
Does the same section cover a committee, or only the full Board?
Both. Section 175(1) applies to a resolution of the Board or of a committee of the Board. The draft goes to all members of that committee, at their addresses registered with the company in India, and the majority is of the members entitled to vote. The one-third right to force a meeting is worded for directors of the company, not for committee members.
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How this guide was prepared
This guide is published by the Complied AI research desk. Its source list and stated position were checked against the official records shown below on 28 September 2026.
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