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

Which statement about the Board's powers under Section 179(1) is correct?

The Board's general powers are subject to the Act, the memorandum, the articles and regulations duly made, and it may not exercise any power required to be exercised by the company in general meeting. Section 179(1) says this, so such restrictions bind the Board.

  1. AThe Board may exercise any power even if the articles say it must be exercised by the company in general meeting
  2. BThe Board's powers are subject to the Act, the memorandum, the articles and regulations duly made, and it cannot do what is required to be done by the company in general meetingCorrect
  3. CA regulation made by the company in general meeting invalidates earlier valid acts of the Board
  4. DThe Board can exercise only the powers listed in Section 179(3)

Explanation

Section 179(1) gives the Board all powers the company can exercise, but subject to the Act, memorandum, articles and regulations made, and the Board cannot do what must be done by the company in general meeting. Under Section 179(2), a later regulation does not invalidate a prior Board act that was valid when done. The list in sub-section (3) is a set of powers to be exercised by meeting resolution, not the limit of the Board's powers.

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