With respect to borowing of company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 September 2013 The Board of directors of XYZ Ltd. intends to borrow a sum of RS.100 crore from a financial institution. The borrowing was duly approved at a Board meeting. One of the directors had opposed the said borrowing being not in the interest of the company and had raised an issue that the said borrowing was beyond the powers of the Board of directors. The company seeks your advice about the borrowing limits and compliances required with the provisions of the Companies Act, 1956.

Ankur Garg

Ankur Garg (Expert)
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17 September 2013 If the proposed borrowing amount along with existing borrowing is in excess of paid up share capital and free reserve, then such borrowing should be approved by the shareholders in the general meeting.

Kindly refer section 293(1)(d) pf com[anies act 1956.

Thanks