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Draft Board Resolution: Approval of Capital Expenditure (Capex)

board resolution for approval of capital expenditureAn expenditure which of capital in nature is called as a 'capital expenditure'. Capital expenditure in short is known as Capex.

Capex are considered to be long-term investments on purchase of items viz. machinery, equipment, computer items, furniture and fixtures, etc. Hence, it requires the approval of the Board of Directors of the company for its purchase.

Different formats of board resolution for approval of expenditures on capital items are given hereunder for your reference while drafting.—


SAMPLE #1
(For a whole financial year)

#. To approve the expenditure of capital items for fy 20xx-xx

"RESOLVED THAT the consent of the Board of Directors be and is hereby accorded to the company for incurring of expenditure of capital in nature during the financial year 20XX-XX on the following items to the extent of a sum of money for each of these items as mentioned hereunder:

Sl. No.      Capital Item       Amount
   1.            ABC                   Up to ............   
   2.            LMN                  Up to ............
   3.            XYZ                   Up to ............

RESOLVED FURTHER THAT the General Manager-Finance of the company be and is hereby authorised to all such acts, deeds and things as may be necessary in this regard."


SAMPLE #2
(For a single capital item)

#. To Approve the Purchase of (Name of the Capital Item)

"RESOLVED THAT the company do purchase (Name of the Capital Item) from any of its suppliers or any other party as may be deemed appropriate.

RESOLVED FURTHER THAT the total amount to be spent on the purchase of the said item be up to a limit of (amount).

RESOLVED FURTHER THAT the CEO and CFO of the company be and is hereby severally authorised to all such acts, deeds and things as may be necessary in this regard."


SAMPLE #3
(short and simple)

#. To approve the purchase of (Name of the Capital Item)

"RESOLVED THAT (Name of the Officer), (Designation) be and is hereby authorised to negotiate and purchase (Name of the Capital Item) for the company from the (Name of the Supplier) for an amount up to (amount), a capital expenditure."

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