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Companies Act Director

Powers of the Board of Directors under the Companies Act, 2013

July 30, 2019 by Team Instabizfilings

Blog Details

The Board of Directors of the Company are the Governing body and are entrusted with the day to day functioning of the Company. The Directors or the Board enjoy certain privileges to smoothly conduct the business operations of the Company. In this Article we will see such powers of Board which can be exercised by the Board of Directors without shareholders’ approval.

 

Applicable Section: Section 179 of the Companies Act, 2013

 

Explanation to text of the Section

-> The Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorised to exercise and do subject to the provisions contained in that behalf in this Act, or in the memorandum or articles, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting:

 

-> The Board shall not exercise any power or which the Company is required to do or exercise in the General meeting by virtue of Law of or Articles or in any regulations. Hence the powers of general meeting cannot be exercised by the Board in Board Meeting.

 

-> The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:

(a) to make calls on shareholders in respect of money unpaid on their shares;

(b) to authorise buy-back of securities under section 68;

(c) to issue securities, including debentures, whether in or outside India;

(d) to borrow monies;

(e) to invest the funds of the company;

(f) to grant loans or give guarantee or provide security in respect of loans;

(g) to approve financial statement and the Board’s report;

(h) to diversify the business of the company;

(i) to approve amalgamation, merger or reconstruction;

(j) to take over a company or acquire a controlling or substantial stake in another company;

(k) any other matter which may be prescribed which are as follows:

i. To make political contributions;

ii. To fill a casual vacancy in the Board;

iii. To enter into a joint venture or technical or financial collaboration

or any collaboration agreement;

iv. To commence a new business;

v. To shift the location of a plant or factory or the registered office;

vi. To appoint or remove key managerial persons and senior

management personnel one level below the key managerial personnel;

vii. To appoint internal auditors;

viii. To adopt a common seal;

ix. To take note of the disclosure of Director’s interest and shareholding;

x. To sell investments held by the company, constituting five percent or more

of the paid-up share capital and free reserves of the investee company;

xi. To accept public deposits and related matters;

xii. To approve quarterly, half-yearly and annual financial statements.

 

-> The Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the manager or any other principal officer of the company or in the case of a branch office of the company, the principal officer of the branch office, the powers specified in clauses (d) to (f) on such conditions as it may specify.

 

-> The acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, or the placing of monies on deposit by a banking company with another banking company on such conditions as the Board may prescribe, shall not be
deemed to be a borrowing of monies or, as the case may be, a making of loans by a banking company within the meaning of the section 179.


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