Skip to content

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

Zenith Agro Ltd's Board wants to pass a decision to make calls on shareholders for money unpaid on their shares. Under the Companies Act, 2013, how must the Board exercise this power?

The Board must exercise the power to make calls on shareholders by a resolution passed at a Board meeting. Section 179(3) lists it among the powers to be exercised by meeting resolutions, and it is not one of the borrowing, investment or loan powers that may be delegated.

  1. ABy a resolution passed at a Board meetingCorrect
  2. BBy the Managing Director acting alone under general authority
  3. CBy an ordinary resolution of members in general meeting
  4. DBy circulation among directors without any later record

Explanation

Section 179(3) lists making calls on shareholders among the powers the Board must exercise by means of resolutions passed at its meetings. Calls are not left to members in general meeting. Acting through the Managing Director alone is wrong because this power is not among the delegable clauses (d) to (f).

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