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CS Professional · CSR and Social Governance · Model Code for Meetings of Non-Corporate Entities

A partnership firm, Rao & Sons, follows the model code for its partners' meetings. Urgent approval for a bank loan was obtained by circulating a written resolution to all partners, and it was approved by the required majority. How should this be dealt with in the records?

The resolution passed by circulation should be kept with the records and noted in the minutes of the next meeting. Such resolutions are valid when approved by the required majority, but the decision must still be documented so the minute record remains complete.

  1. ANo record is needed since no physical meeting took place
  2. BOnly the partner who drafted the resolution keeps a copy
  3. CThe resolution should be placed in the records and noted in the minutes of the next meetingCorrect
  4. DThe resolution is invalid because decisions can only be taken at a physical meeting

Explanation

Resolutions passed by circulation are valid when properly approved, and good practice is to keep the circulated paper and the responses with the records and note the resolution in the minutes of the next meeting. A physical meeting is not the only valid route, and no-record practice defeats compliance.

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