SQ Ltd. is a public company with a total sanctioned Board strength of six directors. Five directors are present at a duly convened Board meeting to deliberate on a proposal for the investment of company funds. Pursuant to the provisions of Section 186 of the Companies Act, 2013, under what condition shall the resolution for the said investment be deemed as passed?

As per Section 186 (5), Companies Act 2013 (Loan and Investment by Company), any resolution for making an investment, giving a loan, or providing a guarantee/security must be passed at a meeting of the Board with the  unanimous consent of all the directors present at the meeting.   Note that if the company has already taken a loan from a PFI, the prior approval of that PFI is also required unless the investment is within the limits specified in Section 186(2) and there is no default in repayment.   As per Section 186 (2), the investment limit is 60% of its paid-up share capital , free reserves  and securities premium account or 100% of its free reserves and securities premium account, whichever is more.