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Board Resolution for Sitting Fees to Directors
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors
________________
CIN: ________________
Date of Meeting: __________
Time: __________
SUBJECT: SITTING FEES TO DIRECTORS
Financial Year: ________________
RESOLVED THAT pursuant to Section 197 of the Companies Act, 2013...
Signature
Board Resolution for Sitting Fees to Directors
Professional Format Guide for Indian Companies
Introduction
A Board Resolution for Sitting Fees to Directors is a formal corporate document that records the Board of Directors' decision regarding the payment or waiver of sitting fees to directors for attending board meetings and committee meetings. Under Section 197 of the Companies Act, 2013, a company may pay sitting fees to directors for attending meetings of the Board or its committees, subject to such sum as may be prescribed under the rules. The Board must formally approve the sitting fees policy for each financial year.
This resolution specifies the applicable financial year, the amount of sitting fees payable (or confirms that no sitting fees shall be paid), and authorises designated persons to implement the decision. The document is essential for maintaining proper corporate governance records and ensuring compliance with statutory provisions regarding director remuneration. It is commonly required during the commencement of each financial year when companies review and approve their director compensation policies.
Benefits of Using a Standard Format
Utilising a professionally drafted board resolution format ensures that all statutory requirements under the Companies Act, 2013 are properly addressed. A ready-to-use template saves valuable time during board meetings, reduces the risk of procedural errors, and provides a consistent framework that captures essential details including the applicable financial year, fee structure, and proper authorisation. Standardised formats help maintain uniform documentation across financial years.
Relevance to Corporate Governance
Director remuneration is an important aspect of corporate governance. Following Company Registration, businesses need to establish policies for compensating directors for their time and expertise. The sitting fees resolution forms part of the company's director remuneration framework and must be documented appropriately. The resolution should be passed at the beginning of each financial year and details of sitting fees paid should be disclosed in the company's annual report as required under the Companies Act.
Board Resolution for Sitting Fees to Directors – Sample Format
[To be printed on Company Letterhead]
Company Name: _______________________________
CIN: _______________________________
Registered Office: _______________________________
Email: _______________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Date of Meeting: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: SITTING FEES TO DIRECTORS
Option A: Where No Sitting Fees are Payable
"RESOLVED THAT pursuant to the provisions of the Articles of Association of the Company and Section 197 of the Companies Act, 2013 read with rules made thereunder, the consent of the Board of Directors be and is hereby accorded that no sitting fees shall be payable to the Directors for attending Board Meetings or Committee Meetings during the Financial Year ______________ (e.g., 2024-25)."
Option B: Where Sitting Fees are Payable
"RESOLVED THAT pursuant to the provisions of the Articles of Association of the Company and Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other applicable rules, the consent of the Board of Directors be and is hereby accorded to pay sitting fees to the Directors for attending Board Meetings and Committee Meetings during the Financial Year ______________ as follows:
• For attending each Board Meeting: Rs. ____________/- (Rupees ____________ Only)
• For attending each Committee Meeting: Rs. ____________/- (Rupees ____________ Only)
For ________________________________________ (Name of the Company)
Signature: _______________________________
Name: _______________________________
Designation: _______________________________
DIN: _______________________________
Frequently Asked Questions
1. Who can be considered as an authorized signatory for the board resolution for sitting fees to directors?
Any director present at the board meeting or the company secretary (if appointed) may be authorised to sign the certified true copy of the resolution. The Board typically designates one or more directors or the company secretary to implement the sitting fees policy, make accounting entries, and ensure timely payment of fees to directors as approved.
2. Is the signature of all directors mandatory on the board resolution format for sitting fees to directors?
No, signatures of all directors are not mandatory. The resolution is passed by a majority of directors present and voting at a duly convened board meeting where quorum is present. The certified true copy may be signed by a single authorised director or the company secretary. The minutes should record the names of directors present and the voting details for proper documentation.
3. Which resolution is required for sitting fees to directors?
A board resolution is required for determining sitting fees payable to directors. The resolution should reference Section 197 of the Companies Act, 2013, the company's Articles of Association, and applicable rules. The sitting fees must not exceed the limits prescribed under the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for meetings of the Board or committees.
4. Does the Board Resolution format for sitting fees to directors need to be certified by a professional?
There is no statutory requirement for the board resolution to be certified by an external professional. The certified true copy may be signed by any director or the company secretary of the company. The resolution forms part of the company's internal records and does not require filing with the Registrar of Companies, though details of sitting fees paid must be disclosed in the annual report.
5. Can a board resolution for sitting fees to directors be passed without convening a board meeting?
While the Companies Act permits certain resolutions to be passed by circulation, matters relating to director remuneration including sitting fees are typically decided at duly convened board meetings to ensure proper deliberation. A resolution passed by circulation is valid if approved by a majority of directors entitled to vote. However, standard practice is to consider such matters at regular board meetings.