Simplification of Functions of Board of Directors
In order to reduce the filing burden on companies and facilitate speedy decision making in companies administration, Government of India vide Notification dated 18.03.2015, omitted six items on which resolutions were required to be passed in a meeting by Board of Directors.
The omitted list of items on which Board of Directors’ resolutions are not required to be passed in meetings are
(i) appointment/ removal of one level below the Key Management Personnel,
(ii) to take note of the disclosure of director’s shareholding,
(iii) buying and selling of investments held by the company
(iv) inviting public deposits,
(v) reviewing the terms and conditions of public deposit and
(vi) approving of quarterly, half yearly and annual financial statements.
The Board of Directors of companies is required to pass a resolution on matters related to administration of a company, for instance:
(i) issuance and buy-back of securities,
(ii) borrowing, investing of company’s funds,
(iii) approval of financial statement,
(iv) approval of amalgamation, merger or reconstruction,
(v) appointment/removal of key managerial personnel (KMP) etc.