Signing Authorities for Getting LOANS

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 November 2009 REF: PRIVATE LIMITED COMPANY

Hi,

Please help to solve the position I am facing for my company. (family business).

The company has 5 directors (all related to each other and all are shareholders). (2 directors only when established 12 years ago. 3 more added 2 years ago).

We are in process of taking LOAN from our existing bank as packing credit against mortgage of MIDC property.

The loan is approved by the BANK. All paperworks from their side are ready.

The BANKERS insist that all documents franked and unfranked related to processing of this loan should be signed by all 5 directors.

Now, 1 director is out of town, and we do not know how much time it will take him to return back.

We want to avail the loan immediately now that its sanctioned. Is there any provisions / act by which we can pass a resolution or do something by which the 5th director is not required to sign any document and we can still avail the loan?

If so, please advise what are my options. After signing of the bank documents, a triparty agreement will be made for LEIN of property between the company, bank and midc. In that case also we don't proceedings to be hindered because the 5th director is not here.

Please can anyone guide me?

Thanks very much in advance.

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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21 November 2009 The Bankers view is correct.

You have to insist the director come if he is in India.

If he is out of country his power of attorney holder can sign.

CS Vandana Kacholia

CS Vandana Kacholia (Expert)
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21 November 2009 or even you can pass a board resolution to authorise 2 directors to sign on every single page of loan documents, hopefully it will help you.

others views are also invited.

Regards

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O.D.SHARMA

O.D.SHARMA (Expert)
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21 November 2009 Generaly any two directors are authorized to take loan thru board resolutions.That is the best way in these cases.All are not required but go thru a board resolution.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2009 Thank you.

I had given the suggestion of Board Resolution to my bankers 3 days ago but they didn't accept it. Not being from a CA/CS background, I thought maybe I was wrong.

Yesterday, after speaking a bit roughly, the bankers asked their advocates and today morning they gave the same suggestion, i.e., to pass Board Resolution by MD to authorize to sign 2 Directors.

It's very frustrating to deal with bankers who either have lower knowledge or act that way to mold us to do whatever they want.