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Board Resolution for Issuance of Shares for Non-Cash Consideration
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
________________
CIN: ________________
Registered Office: ________________
Passed at the Meeting of the Board of Directors of the Company
Date of Meeting: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: ISSUANCE OF SHARES PURSUANT TO ACQUISITION OF BUSINESS FOR CONSIDERATION OTHER THAN CASH
The Chairman placed before the Board the proposal to create, offer for subscription, and to issue and allot Equity Shares to the proprietor/transferor in respect of the acquisition of business/assets for consideration other than cash. The Board discussed the proposal in detail and passed the following resolutions unanimously:
Details of the Business Being Acquired:
Name of the Proprietor/Transferor: ________________________
Name of the Proprietorship/Business: ________________________
Nature of Business: ________________________
"RESOLVED THAT pursuant to the provisions of Section 42 and Section 62(1)(c) of the Companies Act, 2013 read with the Companies (Share Capital and Debentures) Rules, 2014 and the Companies (Prospectus and Allotment of Securities) Rules, 2014 (including any statutory modification or amendment thereto or re-enactment thereof for the time being in force), and subject to the approval of the members of the Company by way of Special Resolution and the Articles of Association of the Company, and subject to such other approvals as may be required under the Companies Act, 2013 or any other applicable law, consent of the Board of Directors of the Company be and is hereby accorded to create, offer for subscription, and to issue and allot:
RESOLVED FURTHER THAT all the Equity Shares to be issued and allotted pursuant to this resolution shall rank pari passu in all respects with the existing Equity Shares of the Company, including rights to dividend, voting rights, and other entitlements.
RESOLVED FURTHER THAT the valuation report obtained from ________________________ (Name of Registered Valuer), a Registered Valuer, for determining the value of the business/assets being acquired and the consideration payable therefor, be and is hereby noted and approved.
RESOLVED FURTHER THAT any Director of the Company be and is hereby authorised to:
- Issue and allot the said Equity Shares to the allottee;
- Convene General Meeting of members to seek approval for the proposed issue and allotment;
- Execute the Business Transfer Agreement and other necessary documents;
- File Form PAS-3 (Return of Allotment) and other requisite forms with the Registrar of Companies;
- Make necessary entries in the Register of Members and other statutory registers;
- Do all such acts, deeds, matters, and things as may be necessary, proper, or expedient to give effect to this resolution, with power to settle any question, difficulty, or doubt that may arise in regard to such issue and/or allotment."
Certified to be True
For ________________
(Name of the Company)
Signature: _________________________
Name:
Designation:
DIN:
Place:
Date:
Board Resolution for Issuance of Shares for Non-Cash Consideration
Professional Format Guide for Indian Companies
Introduction
A Board Resolution for Issuance of Shares for Non-Cash Consideration is a formal corporate document that records the decision of the Board of Directors to issue and allot equity shares in exchange for consideration other than cash. Under the Companies Act, 2013, when a company proposes to issue shares for non-cash consideration such as acquisition of a business, property, assets, or settlement of debts, prior approval of the Board of Directors is mandatory.
This resolution authorises the company to create, offer for subscription, and allot shares to the transferor in lieu of cash payment. It specifies key details including the number of shares, face value, name of the allottee, nature of the business or assets being acquired, and confirms that the shares shall rank pari passu with existing shares. The resolution is subject to shareholder approval and must be filed with the Registrar of Companies.
Benefits of Using a Standard Format
Utilising a professionally drafted board resolution format ensures that all statutory requirements under the Companies Act, 2013 and related rules are properly addressed. A standardised template saves time during business acquisition transactions and reduces the risk of procedural or compliance errors.
It also facilitates smoother ROC filings, ensures consistency in corporate documentation, and supports compliance with private placement norms and valuation requirements.
Relevance to Corporate Transactions
Issuance of shares for non-cash consideration is a significant corporate transaction commonly used during acquisitions and restructuring. After Company Registration, businesses often expand by acquiring proprietorship firms, partnership businesses, or specific assets without immediate cash outflow.
Following the board resolution, shareholder approval through a special resolution under Section 62(1)(c) of the Companies Act, 2013 is generally required. Form PAS-3 must be filed with the Registrar of Companies for return of allotment.
Board Resolution for Issuance of Shares for Non-Cash Consideration – Sample Format
[To be printed on Company Letterhead]
Company Name: _______________________________
CIN: _______________________________
Registered Office: _______________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Date: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: Issuance of Shares Pursuant to Acquisition of Business for Consideration Other Than Cash
The Chairman placed before the Board the proposal to create, offer for subscription, and to issue and allot Equity Shares in respect of the acquisition of business/assets for consideration other than cash. After detailed discussion, the Board passed the following resolutions unanimously:
Details of the Business Being Acquired:
Name of the Proprietor/Transferor: ________________________
Name of the Proprietorship/Business: ________________________
Nature of Business: ________________________
RESOLVED THAT pursuant to the provisions of Section 42 and Section 62(1)(c) of the Companies Act, 2013 read with applicable rules and subject to the approval of members by way of Special Resolution, consent of the Board be and is hereby accorded to create, offer for subscription, and issue and allot:
Number of Equity Shares: ________________________
Face Value per Share: Rs. ________________________/-
Total Consideration Value: Rs. ________________________/-
to the allottee ________________________ in consideration of acquisition of the business for consideration other than cash.
RESOLVED FURTHER THAT the equity shares so issued shall rank pari passu in all respects with the existing equity shares of the Company.
RESOLVED FURTHER THAT any Director of the Company be and is hereby authorised to issue and allot shares, convene general meetings, execute necessary agreements, file Form PAS-3 with the ROC, and do all acts necessary to give effect to this resolution.
CERTIFIED TRUE COPY
For ________________________ (Company Name)
Signature: _______________________________
Name: _______________________________
Designation: _______________________________
DIN: _______________________________
Date: _______________________________
Place: _______________________________
Frequently Asked Questions
1. Is the signature of all directors mandatory?
No. The resolution is passed by a majority of directors present and voting at a duly convened Board Meeting. A certified true copy may be signed by an authorised director or company secretary.
2. Does this resolution require professional certification?
Professional certification is not mandatory. However, certification may be required while filing Form PAS-3 with the ROC as per applicable rules.
3. Is company letterhead mandatory?
Though not mandatory, it is standard corporate practice to prepare board resolutions on company letterhead for authenticity and acceptance by authorities.
4. Who can be an authorised signatory?
Any director or the company secretary can act as the authorised signatory for certifying and executing documents related to the resolution.
5. Which approvals are required?
A Board Resolution followed by a Special Resolution of shareholders under Section 62(1)(c) of the Companies Act, 2013 is required for issuance of shares for non-cash consideration.
