Dear Sir,
In 2024, a private limited company granted a loan to one of its directors. At that time, the company had a total of 5 directors. The Board Resolution (BR) authorizing the loan was signed by 4 directors, while one director was out of India.
In 2025, the company again granted a loan to a director. At that time, the company had 3 directors, and the BR was signed by 2 directors.
Would the Board Resolutions in both cases be considered valid?
The validity depends on attendance, not just the total head count. A resolution is valid if 100% of the directors present at the meeting vote "Yes." If a director is absent, their signature isn't required for unanimity, but if they are present and don't sign/vote, the resolution fails for a loan.
Karia Overseas
Ahmedabad
CA
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