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CS Professional · Strategic Management and Corporate Finance · Raising of Funds from Debt and Procedural Aspects

Under section 179(3), which of the following powers must be exercised by the Board only through resolutions passed at meetings of the Board, but may be delegated by the Board to a committee, the managing director or another principal officer?

The power to borrow monies is exercised by Board resolution at a meeting but can be delegated to a committee of directors, the managing director, the manager or another principal officer. Powers such as issuing securities, approving financial statements and approving mergers fall outside the delegable clauses.

  1. ATo borrow moniesCorrect
  2. BTo issue securities including debentures
  3. CTo approve the financial statement and Board's report
  4. DTo approve amalgamation, merger or reconstruction

Explanation

The proviso to section 179(3) permits delegation only of the powers in clauses (d) to (f): borrowing monies, investing funds, and granting loans or giving guarantee or security. Issuing securities, approving financial statements and approving mergers are clauses (c), (g) and (i), so they cannot be delegated under this proviso.

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