BR — Investments, Loans, Guarantees by Company (Section 186)
Ready-to-use draft board resolution for making loans, investments, guarantees under Section 186 under the Companies Act, 2013. Includes format, legal references, and compliance notes. Illustrative only — customize based on your company's MOA, AOA, and professional advice.
Filing: MGT-14 within 30 days if required under Section 117
When is This Resolution Needed?
making loans, investments, guarantees under Section 186 requires a formal resolution under the Companies Act, 2013. Must be passed at a validly convened Board meeting with proper quorum (Section 174 — 1/3rd of directors or 2, whichever higher), notice (7 days under Section 173(3)), and minutes (Section 118).
Draft Board Resolution
[On the letterhead of the Company]
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF [COMPANY NAME] HELD ON [DATE] AT [TIME] AT [REGISTERED OFFICE ADDRESS]
Present: 1. Mr./Ms. [Name] — Director (Chairperson) | 2. Mr./Ms. [Name] — Director | 3. Mr./Ms. [Name] — Director
Quorum: Present throughout as required under Section 174.
Resolution
"RESOLVED THAT pursuant to Section 186, the Board approves [loan of/investment of/guarantee of] Rs. [Amount] to/in [Entity Name] (CIN: [Number]) for [Purpose], at interest not less than prevailing GOI security yield. The aggregate of all loans + investments + guarantees + security [is within / exceeds] 60% of (paid-up capital + free reserves + securities premium), and accordingly [Board resolution is sufficient / SR is required]."
"RESOLVED FURTHER THAT any one Director or the Company Secretary be and is hereby authorized to do all acts, deeds, and things necessary to give effect to the above resolution, including filing forms with ROC, signing documents, and making applications."
Certified True Copy
For [Company Name]
[Name] | Company Secretary / Director | Date: [Date] | Place: [Place]
Compliance Notes
Key: (a) Beyond 60%: SR required. (b) Interest on loans: ≥ GOI security yield. (c) Register of loans/investments maintained (Section 186(9)). (d) Exemptions: banking, insurance, housing finance, acquisition-principal-business companies. (e) Penalty: Rs. 25,000-5L on company + officers.
Post-Resolution Checklist
| # | Action | Timeline | Responsible | ☐ |
|---|---|---|---|---|
| 1 | Record minutes within 30 days (Sec 118) | 30 days | CS | ☐ |
| 2 | File MGT-14 if required (Sec 117) | 30 days | CS/Director | ☐ |
| 3 | File applicable MCA form | 15-30 days | CS/Director | ☐ |
| 4 | Update statutory registers | 7-15 days | CS | ☐ |
| 5 | Notify stakeholders | As prescribed | CS | ☐ |