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Board Resolution Format for Creation & Modification of Charge

In accordance with the provisions of Section 77 of the Companies Act, 2013, the companies are required to register the particulars of the charge created and signed by it on its property with the Registrar of Companies within 30 days of its creation.

board resolution for creation of charge as per companies act 2013
Before creating a charge on the company's property and assets, the management has to take the approval of the board of directors in its meeting. The type of the charge to be created, the reasons behind it, the details of the parties involved and the details of the properties on which the charge is being created should be clearly informed to the board in writing.

The board after taking into consideration all the information may approve or reject the proposed resolution. Such a charge can be modified in the future. It happens when any terms of the agreement with the parties undergo any changes.


Here are templates of such board resolutions for creation of charge and for modification in it in the future.

FORMAT #1

#. To Approve the Creation of Charge for a Term Loan of Rs. _______

The Managing Director informed the Board that the application of the company to (Name of the Financial Institution), ______ branch seeking a term loan of Rs. __________ has been approved at an interest rate of __% p.a. for a tenure of ___ years/months. It was proposed to create a first charge on its property i.e. land/building situated at (Address) on pari passu basis in order to secure the term loan. The Board considered the same.

Upon motion duly passed and seconded, it was:

“RESOLVED THAT a first pari passu charge by way of assignment/hypothecation/mortgage on the property of the company i.e. land/building admeasuring ___ sq. ft. situated at (Address) be created in favour of (Name of the Financial Institution), _______ branch at (Office Address) to secure the amount of term loan of Rs. ________ (Rupees _______________ only) at an interest rate of __% p.a. for a tenure of ___ years/months.

RESOLVED FURTHER THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby jointly authorised to finalise and execute such deeds, applications, declarations, documents or instruments on behalf of the company as may be required to create a valid charge over the aforementioned property of the company in favour of (Name of the Financial Institution).

RESOLVED FURTHER THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby jointly authorised to file the said deeds and documents with the concerned authorities including Registrar of Companies (RoC), ________ and to obtain such approvals, permissions, consents as may be required in this regard and to settle all matters arising out of and incidental thereto, on behalf of the company and generally to do all such acts, deeds and things as may be ancillary or incidental thereto for giving effect to the foregoing resolutions.

RESOLVED FURTHER THAT the common seal of the company be affixed, if required, to the stamped engrossment(s) on the above mentioned deeds and documents in the presence of (Name of the Officer), (Designation), who shall counter sign the same in the token thereof.

RESOLVED FURTHER THAT any two directors of the company be and is hereby authorised to sign and forward a true copy of the foregoing resolution to concerned authorities as may be necessary.”


FORMAT #2

#. To Approve the Modification of Charge for a Term Loan of Rs. _______

The Managing Director informed the Board that the company had created a first pari passu charge on its property i.e. land/building situated at (Address) on (Date) in favour of (Name of the Financial Institution), ______ branch for obtaining the term loan of Rs. _______ with interested rate at __% p.a. for a period of ___ years. The company has paid Rs. _________ to (Name of the Financial Institution) towards the term loan until (Date). It was proposed to modify the charge, execute necessary documents and file the particulars with the RoC, _____. The Board considered the same.

Upon motion duly passed and seconded, it was:

“RESOLVED THAT pursuant to the provisions of Section 77, 79 and other applicable provisions, if any, of the Companies Act, 2013 ("the Act") read with Rule 3 and 6 of the Companies (Registration of Charges) Rules, 2014, including any amendment thereto, the consent of the Board be and is hereby accorded to modify the charge, which was created on (Date) by way of enhancement/reduction of the sum so borrowed from (Name of the Financial Institution) from Rs. ________ to Rs. ________ with interest rate at ___% per annum against the assignment/hypothecation/mortgage on the property of the company i.e. land/building admeasuring ___ sq. ft. situated at (Address).

FURTHER RESOLVED THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby jointly authorised to finalise and execute such supplemental deed(s), declaration(s), form(s) and document(s) on behalf of the company as may be required to modify the said charge.

FURTHER RESOLVED THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby jointly authorised to file the said documents with the concerned authority including Registrar of Companies (RoC), ________ and generally to do all such acts, deeds, things and matters as may be ancillary or incidental thereto for giving effect to the foregoing resolutions.

FURTHER RESOLVED THAT the Managing Director and the Company Secretary of the company be and is hereby severally authorised to sign and forward a true copy of the foregoing resolution to concerned authorities as may be necessary.”

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