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

Kaveri Textiles Ltd's Board wishes to delegate powers by a Board resolution to its Managing Director. Which of the following powers may it validly delegate under section 179 of the Companies Act, 2013?

The Board may delegate the power to borrow monies. The proviso to section 179(3) permits delegation, by a resolution passed at a meeting, of only clauses (d) to (f), being borrowing, investing and giving loans or guarantees. Buy-back, financial statement approval and amalgamation must stay with the Board.

  1. APower to authorise a buy-back of securities
  2. BPower to approve the financial statement and Board's report
  3. CPower to borrow monies on conditions it specifiesCorrect
  4. DPower to approve an amalgamation or merger

Explanation

The proviso to section 179(3) allows delegation, by a resolution passed at a meeting, only of the powers in clauses (d) to (f): borrowing, investing funds, and granting loans, guarantees or security. Buy-back, approving financial statements and approving amalgamation are in other clauses and cannot be delegated.

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