When is a board resolution enough and when is a shareholder resolution required?

Question

I want to know which company decisions can be approved by the board alone and which need shareholder approval under Indian law. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

When is a board resolution enough and when is a shareholder resolution required? is governed in India primarily by Companies Act 2013, Section 179, Companies Act 2013, Section 114 and Companies Act 2013, Section 117. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 179 lists powers the board can exercise only through a board resolution passed at a duly convened meeting, such as borrowing, investing surplus funds and making calls on shares.

Section 114 distinguishes ordinary resolutions, needing a simple majority, from special resolutions, needing a three-fourths majority, for matters like altering the articles or approving certain related party transactions.

Matters such as alteration of the memorandum, reduction of share capital and buy-back of shares are reserved for shareholders and cannot be decided by the board alone.

Section 117 requires certain board resolutions, including those on borrowing and issuing securities beyond specified limits, to also be filed with the Registrar in Form MGT-14.

Acting beyond the board's delegated authority without the required shareholder resolution can make the underlying transaction voidable and expose directors to liability.

What to do next: 1) Identify whether the proposed decision falls under Section 179 board powers or requires shareholder approval; 2) Draft and pass the resolution with the correct majority under Section 114; 3) File Form MGT-14 with the Registrar where required within 30 days; 4) Record the resolution accurately in the minutes book.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Companies Act 2013, Section 179 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.