Draft Board Resolution for Borrowing in Excess of Paid up Capital and Free Reserves

Board-Resolution-Borrowing-in-Excess-of-Paid-up-Capital-and-Free-Reserves


As per the provisions of Section 180(1)(c) of the Companies Act, 2013 if a company wants to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company‘s bankers in the ordinary course of business, the Board of Directors can do so only with the consent of shareholders by way of special resolution. 

Draft Board Resolution for Borrowing in Excess of Paid up Capital and Free Reserves

RESOLVED THAT pursuant to the provisions of section 180(1)(c) of the Companies Act, 2013 (as amended or re-enacted from time to time) and other applicable provisions if any and subject to the approval of shareholders in general meeting, the consent of the Board be and is hereby accorded for borrowing from time to time any sum or sums of money by way of cash credit, loan, overdraft, discounting of bills, operating of letters of credit, for standing guarantee or counter-guarantee and any other type of credit line or facility up to an amount not exceeding Rupees ……………. [Amount in words] (including the money already borrowed by the Company) on such terms and conditions as the Board may deem fit, notwithstanding that the money to be borrowed together with the money already borrowed by the Company (apart from the temporary loans obtained from the Company’s Bankers in the ordinary course of business) and remaining un-discharged at any given time, exceed the aggregate, for the time being, of the paid up capital of the Company and its free reserves, that is  to say, reserves not set apart for any specific purpose.

RESOLVED FURTHER THAT for the purpose of aforesaid borrowing, Mr./Ms. .………… [Name of Director] and Mr./Ms. ………… [Name of Director], directors of the company, be and are hereby authorized to sign, get registered and deliver on behalf of the company all documents and forms relating to the above credit lines and to secure the facilities by hypothecation of present and future raw materials belonging to the company and lying in any godown, factory or anywhere in India, stock of stores, work-in-progress and finished goods and book debts, and that the company do create an equitable mortgage on the fixed assets of the company in favour of the Banks/Financial Institutions/NBFC’s by depositing the title deeds in relation thereto, as collateral security for the credit facility made available to the company.


RESOLVED FURTHER THAT the securities to be created by the Company aforesaid may rank prior/pari passu with/to the mortgages and/or charges already created or to be created by the company as may be agreed to between the concerned parties.

RESOLVED FURTHER THAT pursuant to section 77 , 85  & 117 of the Companies Act 2013 (as amended or re-enacted from time to time) read with  rule no 3 & 10 of the Companies (Registration of Charges) Rules 2014 and rule no 24 of the Companies (Management and Administration) Rules 2014, Mr./Ms. ……………….. [Name of person], director/company secretary of the Company be and is hereby authorized to do all the acts, deeds and things which are necessary to give effect to the above said resolution and to authenticate it and file form no CHG-1/9, MGT-14 with the Registrar of Companies within the prescribed time and fees and to do relevant entries in the Register of Charges.
Previous
Next Post »
Custom Search