Powers of Directors
POWERS AND DUTIES OF DIRECTORS
POWER OF BOARD OF DIRECTORS - SOURCES
• The Companies Act 1956
•
Section 179 - General Powers enjoyed by board of directors
• Board of directors and Company are co-extensive: directors are entitled to exercise all powers as the a company is authorized to exercise and do
• Articles of Association
• Board Resolutions
• Resolutions in General Meetings
• Agreements/Contracts with Company
SECTION 179 AND 180 – POWERS IN DETAIL
• General Powers Include
1. To take calls on shareholders with respect to money unpaid on shares
2. To authorise buy back of securities
3. To issue securities, including debentures, whether in or outside India
4. To borrow money
5. To invest the funds of the company
6. To make loans or give guarantee or provide security in respect of loans
7. To approve financial statements and the Board’s report
8. To diversify the business of the company
9. To approve amalgamation, merger or reconstruction
10. To take over a company or to acquire a controlling or substantial stake in another company 11. Any other matter which may be prescribed
• Power of Delegation
• Powers in respect of items 4 to 6 can be delegated, by passing a resolution, to any committee of directors, the managing director the manager or any other principal officer of the company
RESTRICTIONS – SECTION 180
• Following powers can be exercised only with the consent of the company by a special resolution
• Sell/lease or dispose whole or substantially the whole of the undertaking of the company
• Invest, otherwise than in trust securities, the amount of compensation received by the company in as a result of any merger or amalgamation
• Borrow money, if the money to be borrowed along with money already borrowed will exceed the aggregate of the paid-up capital of the company and its free reserves (temporary loans from company’s bankers in the ordinary course of business)
• Remit or give time for the repayment of
POWER OF BOARD OF DIRECTORS - SOURCES
• The Companies Act 1956
•
Section 179 - General Powers enjoyed by board of directors
• Board of directors and Company are co-extensive: directors are entitled to exercise all powers as the a company is authorized to exercise and do
• Articles of Association
• Board Resolutions
• Resolutions in General Meetings
• Agreements/Contracts with Company
SECTION 179 AND 180 – POWERS IN DETAIL
• General Powers Include
1. To take calls on shareholders with respect to money unpaid on shares
2. To authorise buy back of securities
3. To issue securities, including debentures, whether in or outside India
4. To borrow money
5. To invest the funds of the company
6. To make loans or give guarantee or provide security in respect of loans
7. To approve financial statements and the Board’s report
8. To diversify the business of the company
9. To approve amalgamation, merger or reconstruction
10. To take over a company or to acquire a controlling or substantial stake in another company 11. Any other matter which may be prescribed
• Power of Delegation
• Powers in respect of items 4 to 6 can be delegated, by passing a resolution, to any committee of directors, the managing director the manager or any other principal officer of the company
RESTRICTIONS – SECTION 180
• Following powers can be exercised only with the consent of the company by a special resolution
• Sell/lease or dispose whole or substantially the whole of the undertaking of the company
• Invest, otherwise than in trust securities, the amount of compensation received by the company in as a result of any merger or amalgamation
• Borrow money, if the money to be borrowed along with money already borrowed will exceed the aggregate of the paid-up capital of the company and its free reserves (temporary loans from company’s bankers in the ordinary course of business)
• Remit or give time for the repayment of