Board Resolution for Ratification of Pre-incorporation Contracts

Pre-incorporation Contracts - as the name itself suggests, these are the agreements or arrangements entered into by the promoters of the company before its incorporation, which are mainly related to the incorporation process of the company and incidental activities thereto.

Such contracts have to be ratified in the board meeting of the board of directors of the company after the incorporation so that necessary action on it can be taken or payment can be made.

Templates of such board resolution is as follows —

SAMPLE #1

#. To ratify the pre-incorporation contracts

“RESOLVED THAT the following pre-incorporation contracts entered into by the promoters of the company be and are hereby ratified and affirmed:

1. Agreement dated ............... with M/s. ............... for legal and financial consultancy in relation to incorporation of the company;
2. Agreement dated ........................ with M/s. ............................ for taking on lease the premises for situation of registered office of the company.

RESOLVED FURTHER THAT ..................., Managing Director be and is hereby authorised to do all such acts, deeds and things, including but not limited to execution of any required documents or instruments, which may be necessary to give effect to this resolution.”

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SAMPLE #2

#. To ratify the pre-incorporation contracts and write off preliminary expenses

“RESOLVED THAT the consent of the Board of Directors be and is hereby given ratifying all the contracts entered into by the promoters of the company before the incorporation of the company, as per the statement tabled before the Board and initialed by the Chairman for the purpose of identification.

RESOLVED FURTHER THAT any preliminary expenses incurred by the promoters of the company for the purpose of the incorporation as per the statement tabled before the Board be and is hereby approved and that the same be written off during the next 5 financial years as per the accounting policy of the company.

RESOLVED FURTHER THAT any of the directors of the company and Company Secretary, be and are hereby severally authorised to do all such acts, deeds and things, including but not limited to execution of any required documents or instruments, which may be necessary to give effect to the foregoing resolutions.”

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SAMPLE #3

#. To ratify the pre-incorporation contracts and to amortise the preliminary expenses

“RESOLVED THAT the following pre-incorporation contracts entered into by the promoters of the company be and are hereby ratified and affirmed:

1. Agreement with M/s. ............... for supply of raw materials dated DD/MM/YYYY

2. Agreement with M/s. ............... for technical consultancy dated DD/MM/YYYY

RESOLVED FURTHER THAT the following preliminary expenses incurred by the promoters of the company for the purpose of the incorporation be and is hereby approved and that the same be amortised during the next five financial years as per the accounting policy of the company:

1. Incorporation fees and stamp duty paid to the Ministry of Corporate Affairs;

2. Consultancy fees paid to M/s. ............... & Associates, Company Secretaries.

RESOLVED FURTHER THAT any of the directors of the company be and are hereby severally authorised to do all such acts, deeds and things, including but not limited to execution of any required documents or instruments, which may be necessary to give effect to this resolution.”


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Relevant Resolution:

Board Resolution for Approval of Preliminary Expenses - available here

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