Skip to content

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

Under section 179, which one of the following powers must the Board of a company exercise only by means of resolutions passed at its meetings, and may NOT delegate to a committee, the managing director or a principal officer?

The power to make calls on shareholders for unpaid share money must be exercised by the Board at its meeting and cannot be delegated. Borrowing, investing funds and granting loans or guarantees may be delegated to a committee, managing director or principal officer by a Board resolution.

  1. APower to borrow monies
  2. BPower to invest the funds of the company
  3. CPower to make calls on shareholders in respect of money unpaid on their sharesCorrect
  4. DPower to grant loans or give guarantee or provide security in respect of loans

Explanation

Section 179(3) lists powers exercisable by Board resolution at meetings. Only the powers in clauses (d) to (f), borrowing, investing and granting loans or guarantees, may be delegated by resolution. Making calls is clause (a) and is not delegable.

Did you get it right without looking?

One question tells you little. A timed set on Board Composition and Powers of the Board shows your real accuracy, how long you take and where you lose marks.

Practise Board Composition and Powers of the BoardFree diagnostic mock

More Board Composition and Powers of the Board questions