Amendments in Companies Act to Simplify Approval of Resolution through Circulation
|Reform Description||Before: As per the Companies Act, a resolution shall not be deemed to have been passed, unless the resolution has been circulated, together with the necessary papers, if any, to all the directors
After: Now, a resolution can be passed by a majority of the directors.
|Jurisdiction/Location||Federal (Entire Pakistan)|
|Department||Security and Exchange Commission of Pakistan (SECP)|
|Date of Implementation||17-11-2021|
|Timeline||Last 03 Months|
|Details||Difficulty||In order to get a resolution passed from the director it was required by law (section 179 of Companies Act) to circulate the resolution along with necessary papers to all the directors. This process of circulation to all director consumed a lot of time and companies could not get their resolution approved promptly specially in case of absence of any director.|
|Analysis||It was felt that to remove this condition and resolution may be approved through a majority of the directors instead of all the directors.|
|Solution||The Companies Act 2017 has been amended (section 179) and it now allows companies to get the resolution approved through majority of directors instead of first circulating to all the directors along with necessary documents.|
|Evidence||Companies Act 2017 Amendment|
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