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Key takeaways
- A board resolution is a formal, legally binding record of a decision made by a company's board of directors under the Companies Act, 2013.
- Board resolutions and shareholder resolutions serve different purposes; Section 179 governs board powers, while Section 114 governs shareholder voting thresholds.
- The three types relevant to companies are ordinary resolutions (simple majority), special resolutions (75% majority), and resolutions by circulation under Section 175.
- Companies need board resolutions for bank account opening, share allotment, ESOP approvals, director appointments, borrowings, and authorising signatories.
- A board resolution format must include the company letterhead, meeting details, quorum confirmation, the "RESOLVED THAT" operative text, statutory references, signatory details, and certification.
- Certain resolutions must be filed with the ROC in Form MGT-14 within 30 days; private companies are exempt from filing MGT-14 for Section 179(3) board resolutions.
- Resolution by circulation (Section 175) allows boards to pass decisions without a physical meeting, but certain matters like securities issuance and borrowings must be approved at a board meeting.
- Well-maintained board resolutions are essential for fundraising due diligence and regulatory compliance.
Board resolution format: A complete guide for founders
A board resolution is a formal, written record of a decision taken by a company's board of directors. It documents what the board approved, when it was approved, and who was authorised to act on that decision. Under Indian company law, board resolutions serve as legally binding evidence of corporate decisions and form a core part of a company's statutory records.
For founders, board resolutions are not a bureaucratic formality. They are required at nearly every inflection point: opening a company bank account, allotting shares to investors, approving an ESOP scheme, appointing directors, or authorising someone to sign documents on the company's behalf. Getting the format and process right from the start reduces friction during fundraising, audits, and regulatory filings.
This guide covers the board resolution format, the legal framework under the Companies Act, 2013, the specific resolutions founders encounter most often, and the compliance steps that follow.
Board resolution vs shareholder resolution
One of the most common points of confusion for founders is the difference between a board resolution and a shareholder resolution. Both are formal corporate decisions, but they originate from different bodies and serve different purposes.
In a startup context, fundraising typically involves both: the board approves the terms and authorises the issuance of securities under Section 179(3)(c), and the shareholders pass a special resolution authorising the private placement under Section 42 of the Act.
Types of resolutions under the Companies Act, 2013
The Companies Act, 2013 classifies resolutions based on the voting threshold required and the body passing them. The "ordinary" and "special" categories, defined under Section 114, apply to shareholder resolutions passed at general meetings. Board resolutions are passed by a simple majority of directors present and voting, and do not carry the ordinary/special classification. Resolution by circulation under Section 175 is an alternative mode of passing a board resolution without convening a meeting.
Shareholder resolutions: ordinary and special
When shareholders vote at a general meeting, the Companies Act prescribes two thresholds. An ordinary resolution requires more than 50% of votes cast in favour. A special resolution requires at least 75%.
Board resolutions: at a meeting or by circulation
Board decisions are passed by a simple majority of directors present and voting at a duly convened board meeting. No "ordinary" or "special" label applies. For matters that do not require a physical meeting, the board can pass a resolution by circulation under Section 175.
Resolution by circulation
Section 175 of the Companies Act, 2013 allows the board to pass a resolution without convening a physical meeting. The draft resolution, along with all supporting documents, is circulated to every director at their registered address (by hand, post, courier, or electronic means such as email). The resolution is deemed passed if approved by a majority of directors entitled to vote.
This mechanism is particularly useful for companies where directors may be in different cities or countries. However, not all decisions can be resolved by circulation.
Section 179(3) of the Companies Act, 2013 requires that certain powers be exercised only by resolutions passed at meetings of the board. These include the issuance of securities, borrowing money, investing company funds, granting loans and guarantees, and approving financial statements. Secretarial Standard-1 (SS-1), issued by the Institute of Company Secretaries of India, provides an illustrative list of items that must be placed before the board at a meeting and cannot be passed by circulation.
A safeguard exists under the proviso to Section 175(1): if at least one-third of the total number of directors for the time being request that the circulated resolution be decided at a meeting, the chairperson must put the resolution to a board meeting.
When do companies need a board resolution?
Companies encounter board resolutions far more frequently than founders typically expect. The following are the most common scenarios where a board resolution is required:
1. Opening a company bank account. Banks require a certified copy of the board resolution authorising the opening of the account and designating authorised signatories. This is often the first board resolution a company passes.
2. Allotment of shares to investors. Under Section 179(3)(c), the board must pass a resolution authorising the issuance of securities. After funds are received and the share allotment is approved, the company files a return of allotment in Form PAS-3 with the Registrar of Companies (ROC) within 15 days.
3. Approving an ESOP scheme. Before an ESOP scheme can be put to shareholders for approval, the board must first approve the scheme, the ESOP pool size, and the authority to issue grants. The board resolution precedes the shareholder resolution.
4. Granting individual ESOP grants. Each batch of ESOP grants typically requires board approval (or approval from a committee authorised by the board) specifying the grantees, number of options, exercise price, and vesting schedule.
5. Appointing or removing a director. The appointment of additional directors, the acceptance of a director's resignation, or the filling of a casual vacancy each require a board resolution. Form DIR-12 must be filed with the ROC within 30 days.
6. Approving related-party transactions. Under Section 188, transactions with related parties that exceed prescribed thresholds require board approval (and in some cases, shareholder approval).
7. Authorising a person to sign documents, contracts, or filings. Whether it is signing a lease, executing a shareholder agreement, or filing statutory forms with the ROC, the board must authorise the signatory through a resolution.
8. Approving borrowings. Under Section 179(3)(d), borrowing money must be approved by a resolution passed at a meeting of the board.
9. Approving the annual financial statements. The board approves the financial statements before they are placed before shareholders at the AGM.
Key components of a board resolution format
A well-structured board resolution under Indian law contains the following elements. Each component serves a specific legal or evidentiary purpose.
1. Company letterhead. The resolution must be printed or drafted on the company's official letterhead. This establishes the identity of the legal entity passing the resolution.
2. Title and meeting reference. The resolution should clearly state that it is a certified true copy of a resolution passed at a meeting of the board of directors. It should include the meeting number (e.g., "Seventh Meeting of the Board of Directors for FY 2025-26"), the company name, the registered office address, the date of the meeting, and the time.
3. Quorum confirmation. The resolution should confirm that a quorum was present, as required under Section 174 of the Companies Act, 2013. The minimum quorum for a board meeting is one-third of the total number of directors or two directors, whichever is higher.
4. Chairperson details. The name of the person who chaired the meeting should be recorded.
5. Resolution text. The operative portion begins with "RESOLVED THAT" in capital letters and states the specific decision in clear, unambiguous language. If additional authorisations follow from the primary decision, they are recorded as "RESOLVED FURTHER THAT." The resolution text should specify: what action is being approved, the statutory provision under which it is being approved (where applicable), the name and designation of the person authorised to act, and any conditions or limits on the authorisation.
6. Director and signatory details. The names, designations, and Director Identification Numbers (DIN) of the directors who participated in the meeting should be listed. The resolution is signed by the chairperson of the meeting and, in many cases, by the company secretary (if one is appointed). The company seal or rubber stamp may also be affixed.
7. Certification. A certified true copy (CTC) of the resolution is the version shared with external parties such as banks, regulators, and investors. It is typically certified by a director or the company secretary, with the words "Certified True Copy" and a signature, name, and designation.
Sample board resolution format for companies
This board resolution template/format is a representative board resolution format for one of the most common use cases: opening a company bank account. The structure applies across resolution types; only the operative "RESOLVED THAT" language changes.
How to draft a board resolution: step by step
1. Identify the action and the legal basis
Before drafting, confirm what the board is approving and whether it falls within the board's authority or requires shareholder approval. Check the relevant section of the Companies Act, 2013 and the company's AoA.
2. Convene the board meeting with proper notice
Under Section 173, at least seven days' notice must be given for a board meeting. The notice should include the date, time, venue (or video-conferencing link), and the agenda. Shorter notice is permissible if at least one independent director (in companies required to appoint one) is present at the meeting, or with the consent of a majority of directors entitled to attend and vote.
3. Confirm quorum
The meeting cannot proceed without a quorum. Section 174 sets the minimum at one-third of the total directors or two directors, whichever is higher.
4. Draft the resolution text
Use clear, specific language. Avoid vague authorisations. State the action, the legal provision, the authorised person, and any limits. Each distinct agenda item should have its own resolution.
5. Record the vote
Note whether the resolution was passed unanimously or by majority. Record any abstentions or dissenting votes.
6. Sign and certify
The chairperson signs the minutes and the resolution. Certified true copies are prepared for external submission.
7. File the resolution, if required
Certain resolutions must be filed with the ROC using Form MGT-14, as explained in the next section.
Board resolutions and due diligence: Why format matters
During a fundraising round, investor due diligence teams review the company's corporate records closely. Board resolutions form a significant part of this review. Inconsistencies, missing resolutions, or improperly formatted documents can slow down a transaction or raise governance concerns.
The specific resolutions that due diligence teams typically examine include:
- Resolutions approving the creation of the ESOP pool and individual grant approvals
- Resolutions authorising prior share issuances and allotments
- Resolutions approving changes to the AoA or MoA
- Resolutions appointing or removing directors
- Resolutions approving related-party transactions
- Resolutions for borrowing and creating charges on company assets
Founders who maintain well-formatted, consecutively numbered resolutions with proper cross-references to the relevant statutory sections create a cleaner audit trail. This reduces back-and-forth during diligence and signals governance maturity to investors.
EquityList's Board Consents feature allows companies to issue board and shareholder resolutions digitally, track signing statuses in real time, and maintain a complete audit trail. If a consent needs to be rescinded or amended (due to an error or a procedural defect, for example), the platform records the rescission, links it to the replacement resolution, and preserves the full chain of changes for auditors and legal teams.
Book a demo to see how it works.
FAQs
1. What is the format of board resolution?
A board resolution is drafted on the company's official letterhead and begins with the meeting reference: the company name, meeting number, date, time, and registered office address.
This is followed by a list of directors present (with their Director Identification Numbers), confirmation that quorum requirements under Section 174 of the Companies Act, 2013 were met, and the name of the chairperson.
The operative portion of the resolution begins with "RESOLVED THAT" in capital letters, stating the specific decision, the statutory provision under which it is being approved (where applicable), and the name and designation of the person authorised to act.
Subsequent authorisations are recorded as "RESOLVED FURTHER THAT." The resolution is signed by the chairperson, and a certified true copy (CTC) is prepared for submission to external parties such as banks or the Registrar of Companies.
2. Who writes a board resolution?
In companies that have a company secretary, the company secretary typically drafts board resolutions.
In early-stage companies that have not yet appointed a company secretary, any director or an authorised officer can draft the resolution. Many companies rely on their legal counsel or a practising company secretary to draft resolutions, particularly for equity events such as share allotments or ESOP approvals.
3. What are the three types of resolutions?
Under the Companies Act, 2013, the three types of resolutions relevant to company governance are ordinary resolutions, special resolutions, and resolutions by circulation.
4. How long is a board resolution valid for account opening?
A board resolution for opening a bank account does not have a fixed expiry date under the Companies Act, 2013. It remains valid and effective until it is revoked by the board and a written notice of revocation is given to the bank.
