Format of Board Resolution to enter into Contract or Agreement

In a company, the actions taken up by any person, on behalf of the company, should be backed by some kind of authorisation that is given to him.

No director or officer or employee is at liberty to do anything on their own will without either having an authorisation for it or taking prior approval for it or getting their actions ratified after starting or completing the work.

Likewise, in order to execute an agreement or negotiate for it, on behalf of the company, a director / officer should be given an authorisation by passing of a board resolution in this regard.

Templates of such board resolution are as follows:—

SAMPLE #1

(common authorisation for signing several contracts)

“RESOLVED THAT (Name of the Officer), (Designation) be and is hereby authorised to enter into all the contracts with the clients, suppliers and any other parties as may be necessary in relation to the ............... product or services of the company.

RESOLVED FURTHER THAT (Name of the Officer), (Designation) be and is hereby also authorised to submit tender, negotiate commercials and finalise the said contracts in addition to signing and executing the same.

RESOLVED FURTHER THAT the consent of the Board be and is hereby accorded to (Name of the Officer), (Designation) for having his discretion as to whether to delegate the authority to sign and execute the said contracts to any subordinate employee of the company not below the cadre of .....

RESOLVED FURTHER THAT all the said contracts must be approved in writing by the Managing Director of the company before the execution by (Name of the Officer), (Designation) and that (Name of the Officer) shall intimate and consult in advance with the Managing Director on any delegation of the authority given under this resolution.”

..............................................

SAMPLE #2

(approval and authorisation for signing of a specific contract)

“RESOLVED THAT (Name of the Officer), (Designation) be and is hereby authorised to sign and execute the contract with M/s. .............................. in relation to the rendering of ................... services of the company.

RESOLVED FURTHER THAT a draft copy of the said contract with M/s. ............................... as tabled before the Board in this meeting, and for the purpose of identification initialed by the Chairman, be and is hereby approved.”