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Board Resolution for Approval of Related Party Transactions
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
________________
CIN: ________________
Registered Office: ________________
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: ________________
SUBJECT: APPROVAL OF CONTRACT/ARRANGEMENT WITH RELATED PARTY
"RESOLVED THAT pursuant to the provisions of Section 188 read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, and other applicable provisions of the Companies Act, 2013 and rules framed thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force),
the consent of the Board of Directors be and is hereby accorded to enter into a contract/arrangement with:
Name of Related Party: ________________
Nature of Relationship: ________________
Nature of Transaction: ________________
A copy of the proposed contract/arrangement has been placed before the meeting and initialled by the Chairman for identification purposes. The material terms and particulars are as set out in the agenda enclosed with the notice of this meeting.
RESOLVED FURTHER THAT pursuant to the provisions of Section 189 read with Rule 16 of the Companies (Meetings of Board and its Powers) Rules, 2014, and other applicable provisions of the Companies Act, 2013 and rules framed thereunder, Mr./Ms. __________ [Name], __________ [Designation] of the Company be and is hereby authorised to:
- Make the necessary entries in the Register of Contracts or Arrangements in which Directors are Interested;
- Authenticate the register and maintain proper records as required under the Act;
- Execute all documents, deeds, and writings and perform all such acts as may be necessary to give effect to this resolution.
Certified to be a True Copy
For ________________
Signature: _________________________
Name: ________________
Designation: ________________
DIN: ________________
Board Resolution for Approval of Related Party Transactions
Professional Format Guide for Indian Companies
Introduction
A Board Resolution for Approval of Related Party Transactions is a formal corporate document that records the consent of the Board of Directors before the company enters into any contract or arrangement with a related party. Under the Companies Act, 2013, prior board approval is mandatory to ensure transparency, prevent conflicts of interest, and safeguard stakeholder interests.
Related parties include directors, key managerial personnel, their relatives, and entities in which they exercise significant influence or control. This resolution is essential for statutory compliance and is commonly reviewed during audits, regulatory filings, and disclosures in financial statements.
Benefits of Using a Standard Format
Adopting a professionally drafted board resolution format ensures compliance with statutory requirements and reduces the likelihood of procedural errors. A standardised template saves time during board meetings and ensures that all legally mandated particulars are properly documented.
This approach minimises documentation gaps and facilitates smooth regulatory review during statutory audits or inspections.
Relevance to Statutory Compliance
Proper documentation of related party transactions is a key component of ongoing compliance obligations. Companies registered under the Companies Act, 2013 must maintain accurate records for statutory audit purposes and annual return filings.
Where transaction values exceed prescribed thresholds, shareholder approval may also be required. Maintaining properly drafted board resolutions supports broader compliance requirements and reinforces sound corporate governance practices.
Board Resolution for Approval of Related Party Transactions – Sample Format
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 of Meeting: __.__.______
Time: ______ (Hours)
Venue: ___________________________
SUBJECT: APPROVAL OF CONTRACT / ARRANGEMENT WITH RELATED PARTY
RESOLVED THAT pursuant to the provisions of Section 188 read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, and other applicable provisions of the Companies Act, 2013 (including any statutory modifications or re-enactments thereof), the consent of the Board be and is hereby accorded to enter into a contract/arrangement with the related party as detailed below:
Name of Related Party: ___________________________
Nature of Relationship: ___________________________
Nature of Transaction: ___________________________
A copy of the proposed contract/arrangement has been placed before the meeting and initialled by the Chairman for identification. The material terms and particulars are as set out in the agenda enclosed with the notice of the meeting.
RESOLVED FURTHER THAT pursuant to Section 189 read with Rule 16 of the Companies (Meetings of Board and its Powers) Rules, 2014, Mr./Ms. __________ (Name), __________ (Designation) be and is hereby authorised to make necessary entries in the Register of Contracts or Arrangements in which Directors are Interested and to maintain the same in compliance with the Act.
RESOLVED FURTHER THAT the authorised person be empowered to execute all documents and perform such acts as may be required to give effect to this resolution.
Certified to be a True Copy
For ___________________________ (Name of the Company)
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 at the meeting. Interested directors must abstain from voting. A certified copy may be signed by an authorised director or the company secretary.
2. Does the resolution require professional certification?
Professional certification is not mandatory. However, certification by a practising professional may be requested by auditors, banks, or regulators.
3. Should the resolution be printed on company letterhead?
While not legally mandatory, using company letterhead is considered good corporate practice and helps with authenticity and audit verification.
4. Who can sign the certified copy?
Any authorised director or the company secretary may sign the certified copy. Typically, the Chairman of the meeting signs board resolutions.
5. Is shareholder approval also required?
Shareholder approval is required only when transaction values exceed prescribed thresholds or fall under specified categories, subject to the Companies Act and SEBI regulations where applicable.