Resolution for Parent Company to honor obligation of Subsidiary

This is a template of board resolution in case of a tender submission.

In the tender submission, the Bidder is the subsidiary/ sister concern / group company, who wishes to draw upon the technical and financial capability of its parent company for the project to be undertaken under the tender.

Hence, it will have to submit a legally binding undertaking supported by a board resolution from its parent company at the time of the submission of the tender document to the effect that all the equity investment obligations of the bidder/ applicant shall be deemed to be equity investment obligations of the parent company and in the event of any default the same shall be met by the parent company.

Template of board resolution to be passed by the Parent / Holding / Group company.

SAMPLE

“RESOLVED THAT pursuant to the provisions of the Companies Act, 2013 read with the relevant provisions of the Memorandum and Articles of Association of the company and in view of the fact that ....(name of the company)...., being the parent/ holding/ group-company, holding ....% of the equity in .....(name of the bidder company)....., the subsidiary/ sister concern, the consent of the Board of Directors be and is hereby accorded for the company to undertake to invest the entire amount proposed to be invested by .....(name of the bidder company)..... in case of failure of ....(name of the bidder company).... to make such investment in the project envisaged in the tender no. ....................... dated ................ floated by ...........(organisation's name)............ for ............(tender project short brief)...................... 

FURTHER RESOLVED THAT (name and designation of director / officer) and (name and designation of director / officer)  whose signatures are attested hereunder, be and is hereby authorized to enter into and take all the steps required to be taken by the company in this regard, including in particular, signing and issuing of all the related letter, undertakings, any other documents required to be submitted to the ................. as part of the Tender or such other documents as may be necessary in this regard.

Sign: .......................                      Sign: .......................

Name: ...................................        Name: ...................................

Title: .............................                Title: .............................

FURTHER RESOLVED THAT a copy of the foregoing resolution be furnished to ........................, certified as a true copy by (Name of the Director), (Title) and (Name of the Director), (Title) of the company.”

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Disclaimer: The above resolution sample is only for your reference to help you with drafting. Do refer the exact provisions of the relevant enactment, relevant rules framed thereunder and any other applicable laws or documents in order to not to miss out anything important while drafting.