Board Resolution For Signing Loan Agreement Template for England and Wales

It's the formal written record of the directors' decision to authorise the company to enter into a loan agreement with a specified lender. Banks and other lenders require a certified copy of the resolution as evidence of the company's corporate authority to borrow, alongside confirmation of the authorised signatories who will execute the loan documents.

Not necessarily. The resolution can be passed by a sufficient majority in accordance with the Articles of Association. The quorum required depends on the Articles. Many private companies permit a majority of directors to pass a resolution, or allow a sole director to act alone. The resolution must be passed before the loan documents are signed.

Where the loan is secured by a charge over company assets, form MR01 must be filed at Companies House within 21 days of the charge being created. The filing fee is currently £15 (same-day) or £13 (standard). Late filing requires a court order to validate the charge, which is expensive and uncertain. The board resolution should confirm who is responsible for the filing.

If a director is giving a personal guarantee, they have a personal financial interest and must declare their conflict under section 177 of the Companies Act 2006. The resolution should record the conflict, confirm the guaranteeing director has received or been advised to seek independent legal advice, and ideally confirm they are aware of the personal consequences of granting the guarantee.

Under section 40 of the Companies Act 2006, a lender acting in good faith may still enforce the loan against the company even without a valid resolution. However, the directors who acted without authority may face personal liability to the company for any loss. The resolution also protects the lender's position in insolvency proceedings.

Yes. Directors must not cause the company to take on debt if there is no reasonable prospect of repayment, as this risks wrongful trading liability under section 214 of the Insolvency Act 1986. The resolution should confirm that the board has reviewed current management accounts and cash flow projections and is satisfied the company can service the debt from its anticipated revenues.

The resolution should identify the lender, the loan amount, the interest rate, the repayment schedule, the security (if any), any financial covenants, and the authorised signatories. Approval of specific terms prevents future disputes about whether the board authorised the final version of the agreement rather than an earlier draft.

Yes. Lenders typically require a certified copy of the resolution, signed by a director or the company secretary and bearing the company name, registration number, and date, confirming that it is a true and accurate copy of the resolution passed at a duly constituted meeting of the board. The certification gives the lender confidence the document is genuine.