Board Resolution for Approval of Preliminary Expenses (Format)

Preliminary expenses are the pre-incorporation expenses incurred by the promoters of the company in order to get the company registered and some other expenses incidental thereto.

Certain preliminary expenses are eligible to be amortized in accordance with the provisions prescribed under section 35D of the Income-tax Act, 1961 (India).

After the incorporation, the Board is generally requested to ratify such expenses, so that the same can be recorded in the books of accounts of the company and be reimbursed to the promoters.

Following board resolutions templates can be referred while drafting.

SAMPLE #1

#. To approve the pre-incorporation expenses

The Board was informed that an amount of INR ................. was incurred in connection with the incorporation of the Company, prior to the issue of certificate of incorporation by the ROC, which is as under:

Sl. No.	Particulars	Amount (Rs.)
1.	Fees paid to the Registrar of Companies, ..... for company name availability, DIN application, notary charges and stamp papers	- - - - -
2.	Filing fees paid to the Registrar of Companies, ..... for incorporation of the company and stamp duties	- - - - -
3.	Professional fee (plus tax) paid to Secretarial Consultant for incorporation and consultation	- - - - -
	TOTAL	- - - - -

The Board considered the same and passed the following resolution unanimously:

“RESOLVED THAT an amount of INR ................... (Rupees ....................................... only) incurred towards preliminary expenses as set out in the statement placed before the meeting be and is hereby ratified and the same be reimbursed to the promoters.

RESOLVED FURTHER THAT in pursuance with section 35D of the Income-tax Act, 1961, the preliminary expenses be amortised for an equal amount over a period of five years.”

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SAMPLE #2

#. To approve the preliminary expenses incurred before company incorporation

The statement of preliminary and pre-incorporation expenses amounting to INR ................../- incurred by the promoters of the Company was placed before the Board in the meeting.

Sl. No.	Particulars	Amount (Rs.)
1.	Charges paid to RoC for Company's Name Availability	* * *
2.	Incorporation filing fees paid to RoC along with stamp duties	* * *
3.	Professional fees with tax paid to Practising Company Secretary	* * *
	TOTAL	* * * *

The Board reviewed the statement and passed the following resolution:

“RESOLVED THAT the preliminary and pre-incorporation expenses amounting to INR ................./- incurred by the promoters in relation to the registration of the Company be and is hereby accepted and approved.

FURTHER RESOLVED THAT the said amount be and is hereby reimbursed to the promoters.

RESOLVED FURTHER THAT the preliminary expenses be amortised in accordance with section 35D of the Income-tax Act, 1961.”

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SAMPLE #3

#. To ratify the preliminary expenses incurred by promoters

The Board was apprised about the preliminary expenditure incurred prior to incorporation of the company and the requirement to record the same in the books of accounts, reimbursement to the promoters and amortisation of the same.

Upon motion duly passed and seconded, it was unanimously:

“RESOLVED THAT a sum of INR ..................... being preliminary expenses incurred by the promoters as per the statement placed before the Board and mentioned hereunder be taken on accounted in the books of the Company.

Sl. No.	Particulars	Amount (Rs.)
1.	Name Availability charges, filing fees for company registration along with stamp duties paid to RoC, .....	- - -
2.	Fees paid to professional consultant for work and consultation related to incorporation	- - -
3.	Stationary expenses, share certificates printing, common seal and other incidental expenses	- - -
	TOTAL	- - - -

RESOLVED FURTHER THAT the promoters be reimbursed this above mentioned sum of rupees from the funds of the Company as and when the funds become available.

RESOLVED FURTHER THAT the preliminary expenses be amortised for an equal amount over a period of ..... years.”



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Relevant Resolution:

Board Resolution for Ratification of Pre-incorporation Contracts - 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.