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

Under the Companies Act, 2013, which of the following powers must the Board of a company exercise only through resolutions passed at its meetings, and cannot exercise by circulation or on its own authority outside a meeting?

The power to borrow monies must be exercised by the Board through resolutions passed at its meetings. Section 179(3) lists it as clause (d) among the powers the Board exercises on behalf of the company by meeting resolutions, along with issuing debentures and granting loans.

  1. ATo borrow moniesCorrect
  2. BTo appoint the statutory auditor in the first year
  3. CTo declare a dividend on equity shares
  4. DTo alter the objects clause of the memorandum

Explanation

Section 179(3) lists the powers that the Board must exercise by resolutions passed at meetings. The power to borrow monies is clause (d) of that list. The other options are matters for the general meeting or other provisions, not items in the Board's list under that sub-section.

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