Board resolution for inter-corporate loan
A board resolution for an inter-corporate loan approves the company lending to another body corporate. Granting loans is a board power under section 179(3)(f) requiring the consent of all directors present, section 186 caps aggregates and floors the interest rate at the prevailing government-security yield, and section 185 governs loans connected to directors.
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.
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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 grant a loan of up to Rs [AMOUNT (RS)] to [BORROWER COMPANY] at [INTEREST RATE] for a tenure of [TENURE], the rate being not lower than the yield prescribed under section 186(7) and the aggregate being within the limits under section 186.
FURTHER RESOLVED THAT [NAME], [DESIGNATION], be and is hereby authorised to execute the loan agreement and related documents, make the entries in the register maintained under section 186(9), and 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 before disbursal, confirming the section 186 limits, the interest floor and that section 185 does not bar the loan; record it in the section 186 register.
Legal basis: s.179(3)(f), s.185 and s.186, Companies Act 2013
Common questions
Is there a minimum interest rate on inter-corporate loans?
Yes, section 186(7) floors the rate at the prevailing yield of government securities of comparable tenor.
When does lending need shareholder approval?
When aggregate loans, guarantees, securities and investments would exceed the section 186 ceiling, a prior special resolution is required.
How does section 185 interact with this?
Loans to directors or persons in whom directors are interested run through section 185’s restrictions and permitted routes first; clear that before the section 186 analysis.
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.