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Special Resolution for Availing External Commercial Borrowing

special resolution for availing external commercial borrowingExternal Commercial Borrowing (ECB) is a commercial loan raised by eligible resident entities from recognised non-resident entities. ECBs should conform to parameters set out by the Reserve Bank of India (RBI) and under Foreign Exchange Management Act, 1999 (FEMA) viz. minimum maturity, permitted and non-permitted end-uses, maximum all-in-cost ceiling, etc.

Format of Special Resolution for availing the External Commercial Borrowing is given hereunder for your reference.—

SAMPLE

#. To approve the External Commercial Borrowings (ECB)

To consider and, if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to the provisions of section 180 and any other applicable provisions of the Companies Act, 2013 (the 'Act') and the rules framed thereunder, read with the applicable provisions of Foreign Exchange Management Act, 1999 ('FEMA') and the Regulations made thereunder and subject to the guidelines/directions of the Reserve Bank of India (RBI), if any, consent of the members of the company be and is hereby accorded to the Board of Directors of the company (the 'Board' which term shall include any of its Committees) to borrow or raise loans from (Name of the Lender) by way of External Commercial Borrowings (ECB) up to (Amount in figures), (Amount in words) equivalent to INR ................ (Rupees ............................... only) to finance the (details of expenditures), on such terms and conditions as may be deemed appropriate by the Board.


FURTHER RESOLVED THAT pursuant to the provisions of section 180(1)(a) of the Act and FEMA, the consent of the members be and is hereby accorded to the Board to create such charges, mortgages and hypothecation in addition to the existing charges, mortgages and hypothecations created by the company on the movable and immovable properties of the company both present and future and in such form and manner and with such rankings as to priority and for such time and on such terms and conditions as the Board of Directors may determine subject to such consent(s)/approvals of requisite authorities as may be necessary in favour of (Name of the Lender) to secure the External Commercial Borrowing (ECB) of up to (Amount in figures), (Amount in words) equivalent to INR ................ (Rupees ............................... only) being provided by them together with interest at agreed rates, compound/additional interest, charges, expenses and all other moneys payable by the company to (Name of the Lender) in terms of the loan agreement to be entered into by the company and (Name of the Lender) in connection with the ECB.

FURTHER RESOLVED THAT the Board of Directors or any officer/employee as may be nominated by the Board, be and is hereby authorized to finalize and execute the loan agreement with (Name of the Lender) and the documents/agreements for creating the aforesaid mortgage and/or charge and to do all such things as may be necessary for giving effect to the foregoing resolutions.”



NOTE: The resolution sample(s) here is only for reference, to help you with drafting. Do refer the exact provisions of the relevant Act, rules/regulations framed thereunder and any other applicable laws to be able to not miss out anything important while drafting.

Comments

  1. Pratap Yadav9/17/2019

    In addition to the resolution, Explanatory Statement is also required. I've added the same.

    ReplyDelete

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