Can anybody share the Resolution for the Intercorporate Loan from Public Co. to Private Co. and with the Point of Conversion of Loan into Equity if Company is not able to repay the amount on demand by the Company in future.
09 July 2024
Certainly! Here's a sample resolution for an inter-corporate loan from a Public Company to a Private Company, including provisions for conversion of the loan into equity in case of non-repayment:
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### Resolution for Inter-Corporate Loan and Conversion of Loan into Equity
#### [Date of Resolution]
At a meeting of the Board of Directors of [Public Company Name] held on [Date], the following resolution was passed:
**Subject: Approval of Inter-Corporate Loan to [Private Company Name] and Conversion of Loan into Equity**
**1. Loan Approval:**
Resolved that pursuant to the provisions of Section ___ of the Companies Act, [Year], and subject to the applicable provisions of the Articles of Association of [Public Company Name] and all other relevant laws and regulations, approval be and is hereby accorded to provide a loan to [Private Company Name] (hereinafter referred to as the "Borrower"), a private company incorporated under the Companies Act, [Year], having its registered office at [Address], in the amount of [Amount in words and figures] ([Currency]) (hereinafter referred to as the "Loan").
**2. Terms of Loan:**
Resolved further that the Loan shall bear interest at the rate of [Interest Rate]% per annum, payable [quarterly/half-yearly/annually] in arrears, commencing from the date of disbursement of the Loan.
Resolved further that the Loan shall be repayable on demand by [Public Company Name] or upon such terms and conditions as may be mutually agreed upon between the parties.
Resolved further that the Loan shall be secured by [mention any security or collateral, if applicable].
**3. Conversion of Loan into Equity:**
Resolved further that in the event the Borrower is unable to repay the Loan upon demand by [Public Company Name] in the future, the Loan or any outstanding amount thereof shall be converted into equity shares of the Borrower at the option of [Public Company Name] at the prevailing market price or as per a pre-agreed valuation.
Resolved further that the terms and conditions for the conversion of the Loan into equity shares shall be finalized and approved by the Board of Directors of [Public Company Name] in accordance with applicable laws and regulations.
**4. Authority to Execute:**
Resolved further that [Name of the Director/Authorized Signatory], [Designation], be and is hereby authorized to execute all necessary documents, agreements, deeds, and instruments on behalf of [Public Company Name] for the purpose of implementing and giving effect to this resolution, including but not limited to the loan agreement and any agreements relating to the conversion of the Loan into equity.
**5. General Authorization:**
Resolved further that [Name of the Director/Authorized Signatory], [Designation], be and is hereby authorized to do all such acts, deeds, matters, and things as may be necessary or expedient to implement and carry out the foregoing resolutions.
** Revocation of Prior Resolutions:**
Resolved further that all resolutions or parts thereof insofar as they are inconsistent with the provisions of this resolution, be and are hereby revoked.
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### Certification
I hereby certify that the above is a true and correct copy of the resolution passed at the meeting of the Board of Directors of [Public Company Name] held on [Date].
[Signature of Director/Secretary] [Name of Director/Secretary] [Designation]
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This resolution template outlines the key aspects related to the approval of an inter-corporate loan from a Public Company to a Private Company, including provisions for conversion into equity in case of non-repayment. Adjust the details as per the specific requirements and legal advice applicable to your situation.
CAclubindia
