Sample Board Resolution for Delegation of Operational Powers to One Director under the Companies Act, 2013

Published : 13-06-2025

Updated : 15-11-2025

Overview : A board resolution for delegation of operational powers is essential when a company wants to authorise a single director to manage day-to-day operations with comprehensive signing authority. This resolution enables simple, fast and immediate decision-making by empowering one director to execute contracts, sign documents, and represent the company across various operational matters. Under the Companies Act 2013, such delegation must be formally approved by the board through a duly passed resolution to ensure legal validity and compliance with corporate governance requirements.

Board Resolution – Delegation of Operational Powers to One Director

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CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF ____________ [COMPANY NAME] HELD ON _______ [DATE] AT _______ [TIME] AT ________________ [MEETING VENUE/REGISTERED OFFICE ADDRESS]

“RESOLVED THAT pursuant to the provisions of Section 179 of the Companies Act, 2013 and the Articles of Association of the Company, and subject to such approvals, permissions and sanctions as may be necessary, the Board of Directors hereby delegates and authorises Mr./Ms. ____________ [DIRECTOR NAME], Director of the Company (DIN: ______), to exercise all operational powers on behalf of the Company as enumerated hereinunder and to act as the sole authorised signatory for all matters pertaining to the day-to-day operations and management of the Company.

RESOLVED FURTHER THAT the said Director is hereby authorised and empowered to sign, execute, deliver, modify, amend, and perform all acts, deeds, documents, agreements, contracts, applications, forms, returns, submissions, and other instruments on behalf of the Company including but not limited to banking operations, opening and operating bank accounts, signing cheques and bank documents, executing loan agreements, investment decisions within prescribed limits, vendor agreements, service contracts, employment agreements, lease deeds, licensing agreements, regulatory compliance submissions, tax returns, GST filings, statutory forms, correspondence with government authorities, and all other operational documents as may be required for the efficient conduct of the Company’s business.

RESOLVED FURTHER THAT for the purpose of banking operations, the said Director is authorised to open, operate, maintain, and close bank accounts with any scheduled commercial banks, execute all banking documents, provide specimen signatures, authorise electronic banking transactions, approve fund transfers, sign loan applications and agreements, provide security documents, and undertake all banking-related activities on behalf of the Company. The said Director shall have full authority to negotiate terms and conditions with banks and financial institutions and to execute all documentation required for availing banking and financial services.

RESOLVED FURTHER THAT the said Director is empowered to represent the Company before all regulatory authorities, including but not limited to the Registrar of Companies, Income Tax Department, Goods and Services Tax authorities, Employees’ Provident Fund Organisation, Employees’ State Insurance Corporation, Labour Department, Pollution Control Board, Municipal authorities, and any other statutory or regulatory bodies. The said Director is authorised to file returns, applications, appeals, and other documents, appear in proceedings, provide undertakings, and handle all regulatory compliance matters on behalf of the Company.

RESOLVED FURTHER THAT the said Director is authorised to enter into and execute agreements with vendors, suppliers, customers, service providers, consultants, employees, and any other third parties for amounts up to Rs. ______ [SPECIFY LIMIT] per transaction without requiring additional board approval, provided such transactions are in the ordinary course of business and in the best interests of the Company. For transactions exceeding the specified limit, prior board approval shall be mandatory.

RESOLVED FURTHER THAT the said Director is empowered to make investment decisions on behalf of the Company in securities, fixed deposits, mutual funds, and other financial instruments up to an aggregate amount of Rs. ______ [SPECIFY LIMIT] during any financial year, subject to compliance with applicable laws and regulations. All such investments shall be reported to the Board at the next board meeting for ratification and approval.

RESOLVED FURTHER THAT the said Director is authorised to borrow funds on behalf of the Company from banks, financial institutions, and other lenders up to an amount of Rs. ______ [SPECIFY LIMIT], including working capital facilities, term loans, overdraft facilities, and other credit arrangements, subject to compliance with the provisions of Section 180 of the Companies Act, 2013 and applicable regulatory requirements.

RESOLVED FURTHER THAT the said Director shall maintain proper records of all actions taken under this delegation and shall report monthly to the Board regarding significant transactions, decisions, and developments. The said Director shall also place before the Board at each meeting a comprehensive report of all activities undertaken pursuant to this resolution for review, discussion, and ratification.

RESOLVED FURTHER THAT this delegation of powers shall remain valid until specifically revoked by the Board of Directors through a subsequent resolution. The Board reserves the right to modify, restrict, or withdraw any or all of the powers delegated herein at any time through appropriate board resolution.

RESOLVED FURTHER THAT any Director or Company Secretary of the Company is hereby authorised to do all such acts, deeds, matters, and things as may be necessary to give effect to the above resolutions and to file necessary forms or documents with regulatory authorities as may be required.”

Relevant Legal Provision:

Section 179 of the Companies Act 2013 empowers the Board of Directors to exercise all powers and do all acts as the company is authorised to perform. The Board can delegate specific powers to committees, managing directors, managers, or principal officers through resolutions passed at board meetings. The first proviso to Section 179(3) specifically allows the delegation of powers, including borrowing money, investing funds, and granting loans to authorised personnel, subject to conditions specified by the board.

Section 166(6) of the Companies Act 2013 establishes that whilst directors cannot assign their office to others, they can delegate operational powers within the legal framework. However, such delegation must ensure proper reporting mechanisms and board ratification of actions taken by the delegate, maintaining the principle that ultimate responsibility remains with the Board of Directors.

Setindiabiz Services:

At Setindiabiz, we provide comprehensive corporate secretarial services, including professional drafting of board resolutions for the delegation of powers, ensuring complete compliance with the Companies Act 2013. Our expert team assists companies in structuring appropriate delegation frameworks that balance operational efficiency with regulatory compliance requirements. Visit https://www.setindiabiz.com/secretarial-retainership.

FAQ’s

Can a company delegate all board powers to a single director?

Whilst Section 179 allows extensive delegation, certain powers like declaring dividends, recommending final accounts, and borrowing beyond specific limits require collective board decisions. The delegation should be reasonable and in the company’s best interests whilst maintaining board oversight.

Is there a monetary limit for the delegation of operational powers?

The Companies Act 2013 doesn’t prescribe specific monetary limits for delegation. However, companies should establish reasonable thresholds based on their size, business nature, and risk appetite. For borrowing powers, Section 180 requirements must be considered for amounts exceeding prescribed limits.

Can operational powers be delegated to a non-executive director?

Yes, operational powers can be delegated to any director, including non-executive directors. However, practical considerations suggest that executive directors or managing directors are more suitable for day-to-day operational responsibilities, given their active involvement in company management.

How often should delegated powers be reviewed by the board?

The board should regularly review delegated powers, ideally quarterly or at least annually. The delegate should provide comprehensive reports of actions taken, and the board should ratify significant decisions to maintain proper governance standards.

Can delegated powers be further sub-delegated?

Sub-delegation depends on the specific authorisation in the resolution and the company’s Articles of Association. Generally, unless expressly permitted, delegated powers cannot be further sub-delegated as per the legal principle “delegatus non potest delegare.”

What happens if the director with delegated powers becomes unavailable?

Companies should include provisions for temporary delegation or alternative arrangements in case the authorised director becomes unavailable. This ensures business continuity and prevents operational disruptions during emergencies or director absence.

Are there any reporting requirements for actions taken under delegated powers?

Yes, the authorised director must maintain proper records and report to the board regularly. Significant transactions should be placed before the board for ratification, and monthly or quarterly reports should detail all activities undertaken under the delegation.

Does delegation of operational powers require shareholder approval?

No, delegation of operational powers under Section 179 does not require shareholder approval. This is an internal board matter, though shareholders retain the right under Section 179(4) to impose restrictions and conditions on board powers through general meeting resolutions.

Can the board revoke delegated powers at any time?

Yes, the board retains full authority to modify, restrict, or completely revoke any delegated powers at any time through a subsequent board resolution. This ensures that the board maintains ultimate control over corporate governance and decision-making processes.

What are the consequences of exceeding delegated authority?

If a director exceeds the scope of delegated authority, such actions may be considered ultra vires and could potentially expose both the director and the company to legal liability. It’s essential that all actions remain within the specifically defined boundaries of the delegation resolution.

Author Bio

Editorial Team

Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.