Board resolution for related party transaction approval
A board resolution for a related party transaction approves a contract or arrangement with a related party of a kind listed in section 188(1) of the Companies Act 2013. Transactions in the ordinary course of business on arm’s length terms sit outside section 188; where board approval applies, interested directors stay out of the discussion and prescribed particulars are disclosed in the meeting.
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 section 188 of the Companies Act 2013 read with rule 15 of the Companies (Meetings of Board and its Powers) Rules 2014, approval be and is hereby accorded to the company entering into [TRANSACTION] with [RELATED PARTY], on the terms disclosed to the meeting, the interested directors not having participated in the discussion or voting.
FURTHER RESOLVED THAT the particulars of the transaction be entered in the register of contracts and arrangements in form MBP-4 and disclosed in the board’s report as prescribed.
Certified true copy
For [COMPANY NAME]
[NAME]
[DESIGNATION] · DIN: [DIN]
Date: ______________ · Place: ______________
When is this resolution passed?
Pass it at a board meeting (not by circulation) before the transaction; member approval by resolution is added where the transaction crosses the thresholds in rule 15 of the Companies (Meetings of Board and its Powers) Rules 2014.
Legal basis: s.188, Companies Act 2013 read with rule 15, Companies (Meetings of Board and its Powers) Rules 2014
Common questions
Which transactions need section 188 approval?
The kinds listed in section 188(1), such as sale or purchase of goods, property transactions, leasing, availing or rendering services and related appointments, unless in the ordinary course of business on arm’s length terms.
When do members also have to approve?
Where the transaction crosses the monetary thresholds in rule 15; related members do not vote on such a resolution, subject to the exemptions available to private companies.
What records follow an RPT approval?
Entry in the MBP-4 register, disclosure in the board’s report with justification, and form AOC-2 particulars with the financial statements.
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.