Resolution on Creating Charge on Fixed Assets

Charge can be created only when the company has some assets - fixed (e.g. building, machinery, etc.)or current (e.g. charge on stocks, receivables, etc.)

For charge creation you need to file Form 8 with ROC within 30 days.

In case the owner of FA is the Director and the loan has been taken from the bank by the Company against such FA, then no Charge registration and filing of Form 8 with the MCA is required. In this case the title deed of the FA to be deposited with the Bank by the Director in his individual capacity and he will execute the necessary document with regard to such security.

Best Regards

CS Ashwini Kumar

Agreed with Cs Ashwini...and the board resolution format i.e. to be submitted to the bank is ........

CERTIFIED COPY OF THE RESOLUTION PASSED BY THE BOARD OF DIRECTORS OF “XYZ PVT. LTD” HELD ON 31.01.2011 AT 11 AM AT THE REGISTERED OFFICE OF THE COMPANY (ADDRESS)

The Board was informed that abc bank, ..... branch has agreed, at the request of the Company , to grant facilities as under :-

                            Facility                                                                    Limit

1.      Overdraft                                                      Rs. 10.00 Crore

“ RESOLVED THAT approval of the board be and is hereby given to the Company to avail financial assistance from ABC Bank, ......... branch, for the amount not exceeding in the aggregate, Rs.10.00 crores (Rupees Ten Crores only).”

“FURTHER RESOLVED THAT MMM Limited be & hereby requested to provide Fixed Deposit of Rs.10.00 Crores  favouring ABC Bank for the period of as may be necessary to secure various credit facilities to be availed by the company from ABC Bank and acknowledging our liabilities as Guarantors to the said facilities.”

“ FURTHER RESOLVED THAT Shri D, Chairman, is hereby authorized to sign, execute and deliver all the documents as may be necessary for the purpose of availing of said facility and as may be required by the bank & further to furnish, sign, execute & deliver such indemnities and/or declarations and /or affidavits on behalf of the Company in favour of the bank as may be required by the bank in any matter related hereto and generally to do all such acts and deeds as may be necessary for the availing the said financial facility and for all matters connected  therewith and/or incidental thereto, including delegating the Power of Attorney, if necessary.”

Date :                                                                                      Certified to be true

Place :                                                                   

Extract from the meeting of the Board of Directors of M/s ............................................................ held on ................................ at ................P.M., at ............................................................

“RESOLVED THAT the Company do obtain various credit facilities either in Indian or Foreign currencies to the tune of Rs. ............... Crores (total of all advance limits and term loans) by way of term loans, overdrafts, cash credits, pre-shipment and post-shipment credit, opening of letters of credit, issuing of guarantees, including deferred payment guarantees and indemnities, negotiation and discounting of demand and / or usance bills and cheques inland as well as foreign and such other facilities as may be agreed upon from time to time between the Bank and the company, secured by hypothecation / pledge of the Company’s entire goods, movables and other assets, present and future, including documents of title to goods and other assets such as book-debts, outstanding moneys, receivables, claims, bills, invoices, documents, contracts, engagements, securities, investments and rights and all machinery, present and future, and further secured by deposit of all title deeds of the existing immovable properties of the Company with intent to create a security thereon in favour of the Bank and personal guarantees of Shri ...................................., Shri......................................and Shri ................................................ Directors of the Company on such terms and conditions as may be specified by the Bank”.

“FURTHER RESOLVED that Shri ...................................., Shri......................................and Shri ................................................ Directors of the Company be and are hereby jointly and / or severally authorised to appear at the bank and deposit required documents / title deeds of the Company’s immovable properties and to make a declaration on behalf of the Company that the said deposit has been made with intent to create security by way of mortgage thereon in favour of the Bank”.

“FURTHER RESOLVED that the enclosed Arrangement Letter of the Bank which has been placed before the Directors, be and is hereby approved for execution by the Company in accordance with the Articles of Association of the Company”.

“FURTHER RESOLVED that Shri ............................., Director be and is hereby authorised to execute the necessary security documents required by the Bank in this connection and that the Common Seal of the company be affixed wherever necessary in the presence of Shri ..............................., Director in terms of Articles of Association of the Company”.

 "FURTHER RESOLVED that Shri ...................................., Shri......................................and Shri ................................................ Directors of the Company and Shri ................................., Company Secretary be and are hereby jointly and / or severally authorized to sign and submit various forms and documents to be submitted with Registrar of Companies from time to time.”

 “FURTHER RESOLVED THAT Shri ....................................and Shri ................................................ Directors of the Company be and are hereby jointly and / or severally authorized to do all such acts, deeds and things as may be necessary desirable and expedient to give effect to the above resolution.”

“FURTHER RESOLVED that a certified copy of the resolution be forwarded to ................. Bank for their record”.

For ...............................................

(...........................)

Designation

Date:-

Place:-

Please also check the borrowing powers of the Company. And if required suitable increase by way of Ordinary Resolution.

AB is the Director of XYZ pvt. ltd. company.  Company avail facility from bank KMS against mortgage of immvoable property of AB.  Whether XYZ company can give Loan to AB. Whether said Loan will attract Interest.  Further under which head such Loan can be given and upto what extend.

Can charge be created on goodwill?If yes,how can the amount be realised in such case?