Board resolution for corporate guarantee
A board resolution for a corporate guarantee records the board approving the company guaranteeing another person’s obligations, typically a group company’s loan. Giving guarantees is a board power under section 179(3)(f), and section 186 caps aggregate loans, guarantees and investments unless shareholders approve more by special resolution.
Last updated: 27 August 2026
Doing this for a client?
OnCompliance drafts this resolution on the company’s letterhead, details filled from the client’s record, records it in the minutes, and files it in the client’s folder — with the notice, minutes and 21 other board documents made the same way.
Fill it in, edit it, download it
The details you type fill the document as you go. Click into the paper to edit any wording, then download it in Word or as a PDF.
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF [COMPANY NAME] (CIN: [CIN]) HELD ON [MEETING DATE] AT [VENUE]
RESOLVED THAT pursuant to sections 179(3)(f) and 186 of the Companies Act 2013, and with the consent of all the directors present at the meeting, approval be and is hereby accorded to the company giving a corporate guarantee in favour of [BANK] to secure the credit facilities of up to Rs [AMOUNT (RS)] availed by [ON BEHALF OF (BORROWER)], being within the limits under section 186 of the Act.
FURTHER RESOLVED THAT [AUTHORISED PERSON (NAME)], [AUTHORISED PERSON (DESIGNATION)], be and is hereby authorised to execute the deed of guarantee and all related documents and to do all acts necessary to give effect to this resolution.
Certified true copy
For [COMPANY NAME]
[NAME]
[DESIGNATION] · DIN: [DIN]
Date: ______________ · Place: ______________
When is this resolution passed?
Pass it at a board meeting with the consent of all directors present, before executing the deed of guarantee. Check the section 186 limits and, where the beneficiary is a related party, section 185 conditions.
Legal basis: s.179(3)(f), s.185 and s.186, Companies Act 2013
Common questions
What are the section 186 limits on guarantees?
Aggregate loans, guarantees, securities and investments must not exceed 60% of paid-up capital plus free reserves and securities premium, or 100% of free reserves plus securities premium, whichever is higher, unless a special resolution authorises more.
Does a guarantee for a director-connected entity need extra care?
Yes. Section 185 restricts loans, guarantees and security in connection with persons in whom directors are interested; the transaction must fit one of its permitted routes before the board approves it.
Must the guarantee resolution be passed with all directors’ consent?
Section 186(5) requires the consent of all directors present at the meeting for the sanction; record that consent in the minutes.
Can OnCompliance draft this for me?
Yes. OnCompliance drafts the resolution on the company’s letterhead with the details filled from the client’s record, records it in the minutes, and files it in the client’s folder, alongside the notice of the meeting and every other board document.