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CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

Under the Companies Act, 2013, a body corporate holds debentures of Gomti Ltd and wishes to be represented at a meeting of Gomti's creditors held under the Act. Which statement is correct?

The body corporate's directors or other governing body may pass a resolution authorising any person they think fit to represent it at the creditors' meeting. The representative can exercise the same rights as an individual creditor or debenture holder could.

  1. AIts directors or other governing body may by resolution authorise any person it thinks fit to act as its representative at that creditors' meetingCorrect
  2. BOnly an individual debenture holder may be represented at creditors' meetings
  3. COnly a member, not a creditor, may authorise a representative
  4. DThe representative may attend but is not entitled to exercise the rights the body corporate could exercise as an individual creditor

Explanation

Section 113(1)(b) allows a body corporate that is a creditor, including a debenture holder, to authorise by resolution of its directors or governing body such person as it thinks fit to represent it at creditors' meetings. Under sub-section (2), that person exercises the same rights as an individual creditor or debenture holder could. The last option contradicts this.

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