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

The Board of Kaveri Agro Ltd resolves at a meeting to delegate certain powers to its Managing Director. Which of the following powers may the Board delegate to the Managing Director under the proviso to section 179(3) of the Companies Act, 2013?

The power to borrow monies can be delegated to the Managing Director by a Board resolution passed at a meeting. The proviso to section 179(3) permits delegation only of clauses (d) to (f): borrowing, investing funds, and loans, guarantees or security. The other powers must stay with the Board.

  1. AThe power to borrow moniesCorrect
  2. BThe power to approve the financial statement and the Board's report
  3. CThe power to authorise buy-back of securities
  4. DThe power to approve an amalgamation or merger

Explanation

The proviso to section 179(3) allows delegation to a committee of directors, the managing director, the manager or another principal officer only for the powers in clauses (d) to (f): borrowing, investing funds, and granting loans or guarantees. Approval of financial statements, buy-back authorisation and approving amalgamation are outside clauses (d) to (f), so they cannot be delegated.

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