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Full RM + FRM support Instant alerts & premium filters Rent negotiation & relocation helpBoard Resolution for Selling of Property: Format, Process & Legal Guidelines in 2025
Published : July 6, 2025, 1:57 PM
Updated : July 6, 2025, 8:34 PM
Author :
kruthi
Table of Contents
When a company sells real estate, the decision requires formal, documented approval from its leadership. This is achieved through a board resolution for selling of property, a critical legal decision passed by the Board of Directors. It serves as official proof that the sale is authorised, complying with the Companies Act, 2013. This resolution empowers specific directors to execute the deal and is a mandatory first requirement among the legal steps to sell a house, protecting the company’s interests.
When Is a Board Resolution Required for Property Sale?
A formal board resolution is not just a good practice; it is a mandatory requirement for various entities. It is applicable whenever a property is owned by a private limited or public limited company. Furthermore, other organisational structures such as societies, trusts, and even Limited Liability Partnerships (LLPs) must also document their decision to sell property through a similar formal resolution. The directors’ approval for the sale of property must be in place before executing a sale deed or granting a Power of Attorney (POA) for the sale.
Key Elements of a Board Resolution for Property Sale
A properly drafted company property sale resolution must be clear, precise, and contain all essential information to be legally valid. The board resolution format for property sale should include several critical components to ensure there is no ambiguity.
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| Component | Details |
| Resolution Number | Unique ID for record-keeping |
| Date & Venue | Board meeting details |
| Property Description | Address, size, registration number, etc. |
| Authority Given To | Director/Authorized Signatory name and designation |
| Purpose | Sale of the specified property |
| Approval Clause | Statement that the board has approved the transaction |
| Signature & Certification | Signed by Chairman/Authorized Director with company seal |
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Sample Format of Board Resolution for Selling Property
Creating a legal format for property sale resolution requires careful attention to detail. Below is a sample that companies can adapt to their specific needs. This sample board resolution for selling property covers all the necessary elements for a valid resolution.
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF [COMPANY NAME] HELD ON [DATE], AT [TIME], AT THE REGISTERED OFFICE OF THE COMPANY AT [ADDRESS].
RESOLUTION NO: [Resolution Number]
APPROVAL FOR THE SALE OF IMMOVABLE PROPERTY
WHEREAS, the company is the absolute owner of the immovable property located at [Full Address of Property], with Registration Number [Property Registration Number], admeasuring [Size of Property] (hereinafter referred to as "the Property");
AND WHEREAS, the Board of Directors of the company, after due consideration and deliberation, has concluded that it is in the best interest of the company to sell the said Property to generate funds for [Mention Purpose, e.g., business expansion, debt repayment, etc.];
AND WHEREAS, the Board has identified a potential buyer and has negotiated the terms for the sale of the Property.
NOW, THEREFORE, BE IT RESOLVED THAT:
- The consent of the Board of Directors is hereby accorded for the sale of the company's immovable property situated at [Full Address of Property].
- Mr./Ms. [Name of Authorised Director], the [Designation] of the company, be and is hereby authorised on behalf of the company to finalise the terms and conditions of the sale.
- Mr./Ms. [Name of Authorised Director] is further authorised to sign and execute all necessary documents, including but not limited to the Agreement for Sale, Sale Deed, and any other ancillary papers required to complete the transaction. Thinking about the tax implications is also wise at this stage, especially concerning TDS on the sale of property.
- The authority is hereby granted to Mr./Ms. [Name of Authorised Director] to present these documents for registration before the appropriate Sub-Registrar and to do all such acts, deeds, and things as may be necessary to give effect to this resolution.
- The Common Seal of the company, if any, be affixed to the Sale Deed and other relevant documents in the presence of Mr./Ms. [Name of Another Director], Director, who shall also sign the same in token thereof.
RESOLVED FURTHER THAT, a certified copy of this resolution be provided to any concerned party or authority as may be required, certified to be true by any Director of the company.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS
[COMPANY NAME]
___________________
[Name of Chairman/Authorised Director] [Designation] DIN: [Director Identification Number] Date: [Date of Signing]
Legal Provisions to Keep in Mind
When passing a resolution under the Companies Act for property sale, certain legal sections are paramount:
- Section 179(3) of the Companies Act, 2013: This section grants the Board of Directors the power to sell, lease, or otherwise dispose of any of the company's assets. A board resolution is the instrument through which this power is exercised.
- Section 180(1)(a) of the Companies Act, 2013: This is a crucial provision. If the sale involves the whole or "substantially the whole" of the company's undertaking, a board resolution alone is not sufficient. "Substantially the whole" is defined as 20% or more of the company's net worth or an undertaking that generates 20% or more of the total income. In such cases, a special resolution approved by the shareholders is required.
- Tax Implications: The sale will attract capital gains tax in India. Understanding whether the gain is short-term or long-term is essential for financial planning. For instance, knowing the rules around short-term capital gains tax can significantly impact the company's finances after the sale.
How NoBroker Can Help?
Navigating the complexities of selling a company-owned property can be challenging. NoBroker offers expert legal and real estate services to streamline the entire process. From drafting a legally sound board resolution for the sale of immovable property to managing documentation and ensuring compliance with all regulations, our team provides comprehensive support for a smooth and hassle-free transaction.
Frequently Asked Questions
Ans: It is a formal, written document where a company's Board of Directors officially records its collective decision and approval to sell a specific company-owned real estate asset.
Ans: A certified true copy is signed by the Chairman of the board meeting where it was passed, or by another director specifically authorised by the board.
Ans: Generally no. However, Form MGT-14 is mandatory if the sale involves a substantial part of the company's business, as this requires a special shareholder resolution.
Ans: Yes, the resolution can explicitly grant a Power of Attorney (POA) to a named individual, legally authorising them to execute the sale on the company's behalf.
Ans: No. The resolution is passed by a majority vote. Only the Chairman or another authorised director signs the certified copy to attest to its authenticity and approval.
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