Skip to content

Company Law and Practice · Meetings of Board and its Committees

Powers of the Board to Be Exercised at Meetings

Updated 11 October 2026 · Fact-checked

Section 179(3) lists powers the Board must exercise only by resolution passed at a Board meeting, such as making calls, buy-back, issuing securities, borrowing, investing, loans and approving financial statements. Under the proviso, only borrowing, investing and loans or guarantees (clauses (d) to (f)) can be delegated to a committee or officer by a meeting resolution.

Understand Powers of the Board to be Exercised at Meetings

A company acts through its Board. Section 179(1) gives the Board the right to exercise all powers the company is authorised to exercise. This is subject to the Act, the memorandum, the articles and regulations made by the company in general meeting. The Board also cannot do anything the Act or articles require to be done in general meeting.

Some powers are too important to be handled casually. Section 179(3) says the Board must exercise these on behalf of the company by means of resolutions passed at meetings of the Board. The list covers: making calls on shareholders for unpaid share money; authorising buy-back under section 68; issuing securities, including debentures, in or outside India; borrowing monies; investing company funds; granting loans or giving guarantee or security for loans; approving the financial statement and Board's report; diversifying the business; approving amalgamation, merger or reconstruction; taking over a company or acquiring a controlling or substantial stake in another; and any other matter that may be prescribed.

The reason is accountability. A meeting means discussion, a quorum, minutes and a recorded decision. A single director or a small group cannot take these decisions quietly.

Delegation is allowed only in a narrow way. The Board may, by a resolution passed at a meeting, delegate the powers in clauses (d) to (f), that is borrowing, investing and loans, guarantee or security, to a committee of directors, the managing director, the manager or any other principal officer of the company. For a branch office, it may delegate to the principal officer of that branch. The Board can set conditions on the delegation. The other powers, such as calls, buy-back, issue of securities, approving accounts, diversification and mergers, stay with the full Board.

The general meeting keeps control too. Section 179(4) says the company in general meeting can impose restrictions and conditions on how the Board uses these powers. Section 179(2) protects the past: a regulation made later does not invalidate an earlier Board act that was valid when done.

Key rules to remember

Rule of Section 179(3)
Listed powers = exercised by the Board through resolutions passed at Board meetings
The list is in clauses (a) to (k). Clause (k) covers any other matter that may be prescribed.
Delegable powers (proviso to Section 179(3))
Only clauses (d) to (f): borrow monies, invest funds, grant loans / give guarantee / provide security
Delegation is by a resolution passed at a Board meeting, to a committee of directors, MD, manager or other principal officer (branch principal officer for a branch), on conditions the Board specifies.
Non-delegable powers
Clauses (a), (b), (c), (g), (h), (i), (j) stay with the Board
Calls, buy-back, issue of securities, approval of financial statement and Board's report, diversification, amalgamation/merger/reconstruction, takeover or substantial stake.
Limit on committees (Section 378U proviso, Producer Companies)
Board shall not delegate any of its powers, or assign the powers of the Chief Executive, to any committee
This is the Producer Company provision. Do not mix it with the Section 179 delegation rule for ordinary companies.
General meeting's control (Section 179(4))
Company in general meeting may impose restrictions and conditions on the Board's powers in the section
Also remember Section 179(1) second proviso: no act that must be done in general meeting.

How to solve Powers of the Board to be Exercised at Meetings questions

Use this method for any question on which Board powers need a meeting and which can be delegated.

  1. 1Identify the power in the question, for example a loan to another company, a buy-back or approval of accounts.
  2. 2Match it to the list in Section 179(3), clauses (a) to (k). If it is there, it needs a Board resolution passed at a meeting.
  3. 3Check whether the question mentions delegation. If yes, see whether the power is in clauses (d) to (f): borrowing, investing, loans, guarantee or security.
  4. 4If the power is in (d) to (f), confirm that the Board itself passed a resolution at a meeting to delegate, and that the delegate is a committee of directors, MD, manager or principal officer.
  5. 5If the power is outside (d) to (f), conclude that it cannot be delegated and must be decided by the Board at its meeting.
  6. 6Check Section 179(1) provisos and 179(4): does the Act, the articles or a general meeting restriction limit the Board, or does the matter belong to the general meeting?
  7. 7Write the conclusion: state whether the act is valid, and cite Section 179(3) and its proviso.

Quickest way: Split the list into 3 and 7

When to use it: Use it for short-answer or true/false style questions on delegation.

  1. Remember that the list has ten named powers plus a prescribed catch-all.
  2. Mark three as delegable: borrow, invest, lend or guarantee (clauses d, e, f).
  3. Everything else on the list is the Board's own: calls, buy-back, issue of securities, accounts and report, diversify, merge, take over.
  4. Add the condition: delegation itself needs a resolution at a Board meeting.
  5. Close with Section 179(4): the general meeting may restrict the Board.

Common mistakes in Powers of the Board to be Exercised at Meetings

  • Saying the Board can delegate all Section 179(3) powers to a committee.

    Students remember that committees exist and assume they can do anything.

    Fix: Only clauses (d) to (f) are delegable. Write this exact limit in the answer.

  • Treating delegation as valid if the managing director simply decides it.

    Students forget that delegation is itself an act of the Board.

    Fix: State that the Board must pass a resolution at a meeting to delegate, and may specify conditions.

  • Thinking a buy-back or issue of securities can be delegated because it sounds routine.

    Students confuse commercial routine with the statutory list.

    Fix: Buy-back (b) and issue of securities (c) are outside (d) to (f). They stay with the Board.

  • Ignoring that the Board is subject to the Act, the articles and general meeting.

    Students read Section 179(3) alone and skip the provisos in 179(1) and 179(4).

    Fix: Add one line on 179(1) and 179(4) to show full knowledge of the section.

  • Applying the Producer Company rule in Section 378U to ordinary companies.

    Both deal with Board committees and the wording looks similar.

    Fix: Section 378U bars delegation of any Board power to a committee in a Producer Company. Section 179 governs ordinary companies.

  • Forgetting that circulation is not a meeting.

    Students see 'resolution' and assume circulation is enough.

    Fix: Section 179(3) says resolutions passed at meetings. Circulation under Section 175 is a different mode, so for the listed powers state that a meeting is required.

Worked examples

Example 1

The Board of Sunrise Textiles Ltd. authorises its Finance Committee to approve the company's annual financial statement and the Board's report. Is this valid? Also state which powers the Board may delegate.

Show the solution
  1. Provision: Section 179(3)(g) requires the Board to approve the financial statement and the Board's report by a resolution passed at a Board meeting.
  2. Delegation: the proviso allows delegation only of clauses (d) to (f), that is borrowing, investing and granting loans or guarantees.
  3. Analysis: clause (g) is outside (d) to (f), so the Finance Committee cannot be given this power.
  4. Other powers: the Board may delegate borrowing, investment of funds, and loans, guarantee or security to a committee of directors, the MD, the manager or another principal officer, by a resolution at a meeting and on stated conditions.

Answer: The delegation is invalid. Approval of the financial statement and the Board's report must be done by the full Board at its meeting. Only the powers in Section 179(3)(d) to (f) can be delegated.

Example 2

The Board of Kaveri Steels Ltd. passes a resolution at a meeting authorising the managing director to borrow up to ₹5,00,00,000 from banks, subject to conditions on rate and tenure. The articles contain no bar. Is the delegation valid?

Show the solution
  1. Provision: under Section 179(3)(d), borrowing is a power exercised by the Board at meetings.
  2. Proviso: the Board may, by a resolution passed at a meeting, delegate clauses (d) to (f) to a committee of directors, the managing director, the manager or another principal officer, on such conditions as it may specify.
  3. Facts: borrowing is clause (d). The delegate is the managing director. The resolution was passed at a Board meeting. The Board has set conditions on rate and tenure.
  4. Check limits: the articles do not bar it. The general meeting could impose restrictions under Section 179(4), and nothing says it has done so.

Answer: The delegation is valid. Borrowing falls in clause (d), the MD is a permitted delegate, and the Board delegated by a resolution at a meeting with conditions. The MD must act within the ₹5,00,00,000 limit and the stated conditions.

Exam tips

  • Write the section number 179(3) and name the proviso. ICSI-style answers earn marks for the provision first.
  • Always give the delegable clauses as (d) to (f) and name them in words, not only letters.
  • In case-study questions, test two things: is the power on the list, and was delegation done by a Board resolution at a meeting.
  • Add a line on Section 179(4) when the question mentions the general meeting or articles.
  • If a question mentions a Producer Company, bring in Section 378U and 378R(3) separately.

Practice questions from Meetings of Board and its Committees

Powers of the Board to be Exercised at Meetings in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Powers of the Board to be Exercised at Meetings: frequently asked questions

Which powers must the Board exercise at a meeting under Section 179?

Section 179(3) lists them: calls on shares, buy-back, issue of securities, borrowing, investing funds, loans or guarantees, approving financial statements and the Board's report, diversification, merger or reconstruction, takeover or substantial stake, and any other prescribed matter. Each must be done by a resolution passed at a Board meeting.

Which Board powers can be delegated to a committee?

Only the powers in clauses (d) to (f): to borrow monies, invest the funds of the company, and grant loans or give guarantee or provide security. The Board delegates them by a resolution passed at a meeting, on conditions it specifies.

Who can the Board delegate these powers to?

To a committee of directors, the managing director, the manager or any other principal officer of the company. For a branch office, it can delegate to the principal officer of that branch.

Can the general meeting restrict these Board powers?

Yes. Section 179(4) says the company in general meeting may impose restrictions and conditions on the exercise by the Board of the powers specified in the section.