Draft Ordinary Resolution Section 188(1)(f) Companies Act 2013

In accordance with clause (b) of sub-rule (3) of rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, except with the prior approval of the company by a resolution (i.e. ordinary resolution passed in the general meeting of members), a company shall not enter into transaction(s), where the transaction(s) to be entered into, is for related party's appointment to any office or place of profit in the company, its subsidiary company or associate company at a monthly remuneration exceeding Rs. 2,50,000/- as mentioned in clause (f) of sub-section (1) of section 188 of the Companies Act, 2013.

Template of such an ordinary resolution is given hereunder for your reference—

SAMPLE #1 (In case of an Unlisted Company) (modify it suitably as per your requirement)

#. To ratify the services availed from Ms./Mr. ....................., Director (DIN : .................) and payment of .............. fee to her/him

To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 188(1)(f) and any other relevant applicable provisions of the Companies Act, 2013, read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, including any statutory modification(s) or re-enactment thereof for the time being in force, and as recommended and approved by the Board of Directors, the consent of the members be and is hereby accorded for ratification and approval of the ..................... services availed from Ms./Mr. .............., (DIN: ....................) Director, a 'related party' holding an office and place of profit as per Section 188(1)(f) of the Companies Act, 2013, for a period from ...(date)... till the date of this Annual General Meeting at a ....... fee of Rs. ................../- (Rupees ...................................... only) per month and as per other terms & conditions set out in the contract dated ...................... entered into by Ms./Mr. .................................. with the company.

FURTHER RESOLVED THAT the Board of Directors of the company, including Committee(s) thereof, be and is hereby authorised to do all such acts, deeds, matters and things as may be necessary or incidental to give effect to the foregoing resolution.”

SAMPLE #2 (In case of Listed Company) (modify it suitably as per your requirement)

#. Ratification of Services availed from Ms./Mr. ....................., Director (DIN : .................) and payment of .............. Fee

To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 188(1)(f) of the Companies Act, 2013 (the "Act"), and any other relevant applicable provisions of the Act, if any, read with Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014, including any statutory modification(s) or re-enactment thereof for the time being in force, and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as recommended and approved by the Audit Committee, Nomination & Remuneration Committee and the Board of Directors, consent of the members be and is hereby accorded for ratification and approval of the ..................... services availed from Ms./Mr. .............., (DIN: ....................) Director (a 'related party' holding office and a place of profit under Section 188(1)(f) of the Companies Act, 2013 for a period from ...(date)... till the date of this Annual General Meeting at a ....... fee of Rs. ................../- (Rupees ...................................... only) per month and other terms & conditions as set out in the Agreement dated ...................... entered into between the company and Ms./Mr. ...................................”

“RESOLVED FURTHER THAT the Board of Directors of the company (including its Committee thereof) and / or Company Secretary of the company, be and are hereby authorised to do all such acts, deeds, matters and things as may be considered necessary, desirable or expedient to give effect to the foregoing resolution.”

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Imp. Note: Please refer the latest provisions of the Act and rules thereunder, and any other applicable provisions before finalising the resolution. The above mentioned resolutions are only specimen copy of resolutions for reference purpose only.