Sample Board Resolution for Appointment of Nominee Director
Overview : A Board Resolution for the appointment of a Nominee Director is essential when financial institutions, banks, or investors nominate their representative to safeguard their interests on the company's Board. This resolution formalises the appointment under Section 161(3) of the Companies Act 2013, acknowledges the nominating party's rights, and ensures compliance with loan agreements or investment terms. The resolution authorises necessary filings and maintains transparency in corporate governance.
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 161(3) of the Companies Act, 2013, and the Articles of Association of the Company, and in accordance with the terms and conditions of the ____________ [Loan Agreement/Investment Agreement/Shareholders Agreement] dated ____________ [Agreement Date] executed between the Company and ____________ [Financial Institution/Bank/Investor Name], Mr./Ms. ____________ [Nominee Director Name], aged ______ [Age] years, holding DIN ____________ [Director Identification Number], nominated by ____________ [Nominating Institution Name] as its representative on the Board of Directors of the Company, who has signified his/her consent in Form DIR-2 to act as a Director of the Company and has furnished declaration in Form DIR-8 under Section 164 of the Companies Act, 2013, be and is hereby appointed as a Nominee Director of ____________ [Company Name] with effect from ____________ [Date of Appointment].
RESOLVED FURTHER THATthe Board hereby acknowledges and records that the appointment of the said Nominee Director is made in pursuance of the nomination rights conferred upon ____________ [Nominating Institution Name] under the aforesaid agreement and that the said Nominee Director shall represent the interests of the nominating institution on the Board of Directors whilst fulfilling his/her fiduciary duties as a Director of the Company in accordance with the Companies Act, 2013.
RESOLVED FURTHER THATthe tenure of the said Nominee Director shall be co-terminus with the subsistence of the agreement with the nominating institution or until such time as the nominating institution withdraws the nomination or nominates another person in his/her place, whichever is earlier, and that the Nominee Director shall not be liable to retire by rotation under Section 152 of the Companies Act, 2013.
RESOLVED FURTHER THATany Director of the Company or the Company Secretary be and is hereby severally authorised to execute the letter of appointment with the aforesaid Nominee Director acknowledging the terms of nomination and the rights and obligations arising therefrom, file Form DIR-12 along with requisite documents and fees with the Registrar of Companies, ____________ [State], within thirty days of the passing of this resolution, intimate the appointment of the Nominee Director to all relevant stakeholders, maintain appropriate entries in the Register of Directors and Key Managerial Personnel, ensure compliance with all applicable provisions of the Companies Act, 2013 and rules made thereunder, and to do all such acts, deeds, matters and things as may be necessary, proper, desirable or expedient to give effect to this resolution.
RESOLVED FURTHER THATthe Board places on record its acknowledgement of the expertise and experience that ____________ [Nominee Director Name] brings to the Company in his/her capacity as the representative of ____________ [Nominating Institution Name] and looks forward to the valuable contributions in furthering the Company's objectives whilst safeguarding the interests of the nominating institution.
Relevant Legal Provision
The appointment of Nominee Directors is governed by Section 161(3) of the Companies Act, 2013, which empowers the Board of Directors to appoint any person as a director nominated by any institution in pursuance of any law or agreement or by the Central Government or State Government by virtue of shareholding in a Government company. This provision enables financial institutions, banks, and investors to nominate their representatives on the Board to safeguard their interests, particularly when they have provided financial assistance or made significant investments in the company .
Section 149(7) of the Companies Act 2013 defines a nominee director as one appointed to represent the interests of any person in pursuance of any agreement or any law. Unlike other directors, nominee directors are not required to retire by rotation, and their appointment is governed by the terms of the underlying agreement. The nominee director must maintain independence in decision-making whilst representing the nominating party's interests, ensuring a balance between fiduciary duties to the company and obligations to the nominator.
Setindiabiz Services:
Setindiabiz provides comprehensive nominee director appointment services, ensuring seamless compliance with regulatory requirements under the Companies Act 2013. Our expert team assists with drafting professional board resolutions, coordination with nominating institutions, preparation and filing of mandatory forms including DIR-12, obtaining necessary consents and declarations, and providing ongoing compliance support throughout the nominee director's tenure. Visit https://www.setindiabiz.com/director-appointment for detailed information about our director appointment and compliance services.
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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.