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

The Board of Anand Pharma Ltd. resolves at a meeting to delegate certain powers to a committee of directors. Under section 179, which of these powers can it validly delegate by such a resolution?

The Board can delegate the power to borrow monies. The proviso to section 179(3) allows delegation only of borrowing, investing funds, and loans, guarantees or security. Making calls, approving financial statements and approving mergers must be done by the Board itself at its meetings.

  1. APower to make calls on shareholders for unpaid share money
  2. BPower to approve the financial statement and the Board's report
  3. CPower to borrow monies on stated conditionsCorrect
  4. DPower to approve a merger or reconstruction

Explanation

The proviso to section 179(3) permits delegation, by a resolution passed at a meeting, of only the powers in clauses (d) to (f): borrowing, investing funds, and granting loans, giving guarantees or providing security. Calls, approval of financial statements and approval of mergers fall in other clauses and cannot be delegated.

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