Board Resolution for Allotment of Shares

When Is This Board Resolution Required?

Section 62 governs further issue of shares. The Board passes a resolution to allot shares after receiving share application money and ensuring compliance with private placement provisions (Section 42) where applicable.

Pre-Requisites Before Passing This Resolution

• Verify quorum requirements under Section 174
• Ensure 7-day notice was given to all directors (or shorter notice with conditions met)
• Check if any director needs to disclose interest under Section 184
• Confirm the resolution is within the powers of the Board under Section 179/180
• Verify if shareholder approval is also required (Ordinary or Special Resolution)
• Prepare explanatory statement if the matter requires shareholder approval
• Keep certified copy of the resolution ready for ROC filing

Sample Board Resolution -- Allotment of Shares

The following resolution is a sample draft provided for reference and educational purposes only. It must be customized to the specific facts, circumstances, and Articles of Association of the company before use.

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF [COMPANY NAME] (CIN: [CIN NUMBER]) HELD ON [DATE] AT [TIME] AT THE REGISTERED OFFICE OF THE COMPANY SITUATED AT [FULL ADDRESS]

Present:
1. Mr./Ms. [Name] -- Director (DIN: [DIN]) -- Chairperson
2. Mr./Ms. [Name] -- Director (DIN: [DIN])
3. Mr./Ms. [Name] -- Director (DIN: [DIN])

Quorum: The requisite quorum being present as required under Section 174 of the Companies Act, 2013, the Chairperson called the meeting to order.

Item No. [X]: Allotment of Shares

The Chairperson informed the Board that Section 62 governs further issue of shares.

After due deliberation and consideration, the following resolution was unanimously passed:

"RESOLVED THAT pursuant to the applicable provisions of the Companies Act, 2013, and the Rules made thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), and subject to such approvals, permissions, and sanctions as may be required, the Board of Directors hereby approves and authorizes [the specific action as described in the agenda].

RESOLVED FURTHER THAT Mr./Ms. [Name of Director], Director (DIN: [DIN Number]) / Mr./Ms. [Name], Company Secretary, be and is hereby authorized to take all necessary steps, execute all documents, and do all such acts, deeds, matters, and things as may be necessary, proper, or expedient to give effect to this resolution, including but not limited to filing the relevant forms with the Registrar of Companies and other regulatory authorities."

RESOLVED FURTHER THAT the Company Secretary / Mr./Ms. [Name] be and is hereby authorized to file Form [relevant form] with the Registrar of Companies within the prescribed timeline.

The resolution was passed unanimously by all the Directors present at the meeting.

Certified that the above is a true and correct extract from the Minutes of the Meeting of the Board of Directors of [Company Name] held on [Date].

For [Company Name]

________________________
[Name of Director]
Director
DIN: [DIN Number]
Date: [Date]
Place: [City]

Notes and Legal Considerations

• Quorum: Ensure the meeting has proper quorum under Section 174 -- one-third of total directors or two directors, whichever is higher. If any director is interested in the matter, they shall not be counted for quorum (Section 184).
• Notice: Proper notice of the Board Meeting must be given to all directors at least 7 days before the meeting (Section 173(3)). Shorter notice is permissible if at least one independent director (if applicable) is present.
• Disclosure of Interest: If any director has a personal interest in the transaction, they must disclose the nature of their concern or interest under Section 184 at the meeting.
• Minutes: The resolution must be recorded in the Minutes Book maintained under Section 118 within 30 days of the meeting. Minutes must be signed by the Chairperson of the meeting or the next meeting.
• Filing: Determine whether the resolution requires filing with the ROC in Form MGT-14 under Section 117. All Special Resolutions and certain Board Resolutions (specified in Section 117(3)) must be filed.

Related MCA Forms to File After This Resolution

• MGT-14: File within 30 days if this is a Special Resolution or falls under Section 117(3)
• DIR-12: File within 30 days if resolution relates to appointment/cessation of director
• Relevant specific form: File the form specific to the transaction (e.g., SH-7 for capital increase, CHG-1 for charge creation)

Common Errors to Avoid

• Insufficient quorum: Ensure the meeting has the requisite quorum under Section 174 (one-third of total strength or two directors, whichever is higher). Without quorum, the resolution is void.
• Missing disclosure of interest: If any director has a personal interest in the matter being resolved, they must disclose the same under Section 184 before the resolution is passed. Interested directors should not be counted for quorum.
• Incorrect section reference: Always cite the correct section and rule under which the resolution is being passed. Incorrect references may lead to ROC rejection of the subsequent filing.
• Not recording in minutes: Every resolution must be recorded in the Minutes Book within 30 days of the meeting (Section 118). Minutes must be signed by the Chairman within 30 days.
• Not filing MGT-14: Certain Board Resolutions (and all Special Resolutions) must be filed with the ROC in Form MGT-14 within 30 days of passing. Check whether your resolution triggers MGT-14 filing.