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CS Executive · Company Law and Practice · Board Composition and Powers of the Board

A shareholder of Kaveri Textiles Ltd. argues that on the appointment of a Company Liquidator by the Tribunal, the Board's powers automatically cease under Section 313 of the Companies Act, 2013. Which statement best reflects the current position?

Section 313, which dealt with cesser of the Board's powers on appointment of a Company Liquidator, was omitted with effect from 15 November 2016. It is therefore no longer an operative provision, and the shareholder cannot rely on it as it stands today.

  1. ASection 313 is in force and ceases Board powers only in voluntary winding up
  2. BSection 313 has been omitted with effect from 15 November 2016, so the argument cannot rest on itCorrect
  3. CSection 313 applies only to private companies
  4. DSection 313 applies only where the Official Liquidator is appointed

Explanation

The official text shows Section 313 (Cesser of Board's powers on appointment of Company Liquidator) was omitted by Section 255 and the Eleventh Schedule w.e.f. 15-11-2016. Hence it cannot be relied upon as a live provision. The other options wrongly treat it as operative in limited situations.

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