Draft Board Resolution for Loan to Directors


As per the provisions of Section 185(1) of Companies Act, 2013 save as otherwise provided in this Act, no company shall, directly or indirectly, advance any loan, including any loan represented by a book debt, to any of its directors or to any other person in whom the director is interested or give any guarantee or provide any security in connection with any loan taken by him or such other person:

Provided that nothing contained in this sub-section shall apply to—
(a)  the giving of any loan to a managing or whole-time director—
(i) as a part of the conditions of service extended by the company to all its employees; or
(ii) pursuant to any scheme approved by the members by a special resolution; or

(b) a company which in the ordinary course of its business provides loans or gives guarantees or securities for the due repayment of any loan and in respect of such loans an interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India.

Draft Board Resolution for Loan to Directors 

RESOLVED THAT pursuant to provisions of section 185 of the Companies Act, 2013 (including any amendments thereto or re-enactment thereof) (the “Act”) and the scheme approved by the shareholders for the purpose of providing any loan, guarantee or security in connection with loan, the consent of the Board be and is hereby accorded for providing loan of Rs …………. [ amount of loan] to  Mr. / Ms………. [Name of person],  Managing Director/Whole-time Director of the company  for a period of ……. [ nos of year] on such terms and conditions as mentioned in the scheme.

 Mr. / Ms………. [Name of person] director/company secretary be and is hereby authorized to file Form no MGT-14 with the Registrar within the prescribed time pursuant to section 117 of the Act read with rule no 24 of the Companies (Management and Administration) Rules, 2014 along with the fee as prescribed in the Companies (Registration Offices and Fees) rules, 2014 and to make & authenticate necessary entries in the Register of loan or investment prepared pursuant to section 186 read with the rule no 12 of the Companies (Meeting of Board and its Power) Rules 2014. 

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