21 October 2010
Section 291 of the Companies Act, 1956 empowers the Board to exercise its powers in all areas of the Act, where it is specifically mentioned in the Act, or in MOA/AOA that the power shall be exercised at general meeting by the shareholders. The Board can exercise its powers only at a meeting of the Board, in the matter specified in section 292, 262, 316, 386, 297 and 372A, and only with the consent of the company in general meeting, in the matter specified in section 293 and 294(2). Power of the Board under section 316, 372A and 386 can be exercised only with the consent of all the directors present at the meeting and entitled to vote on the item. There are certain act which must be done by Board by means of a resolution passed at the meetingof the Board and not by resolution passed by circulation. Such following powers are given in section 292 of the Act: a. Making of calls on shares; b. Authorizing buy-back; c. Issuing of debentures; d. Borrowing of money, otherwise than on debentures; e. Investing the fund of the company f. Making of loan By virtue of section 372A, a company can directly or indirectly, give: a. Intercorporate loan b. Intercorporate guarantee or provide security in connection with; i. Loan made by any other person to any body corporate, ii. Loan made by any other person by any body corporate c. Intercorporate investment The overall limit of all these together is 60% of its paid up capital and free reserve or 100% of its free reserves, whichever is higher, with the approval of the Board of Directors. If a company, however, intended to make intercorporate loans/ investments/ guarantees/ security beyond the said limit mentioned above, it can do so by passing a special resolution in the general meeting. Regards
Section 166 Pursuant to the provisions of section 166, every company, whether public or private, incorporated under the provision of Companies Act, 1956 shall hold during every year a general meeting of members which shall be called “Annual General Meeting”. It is mandatory on every company to hold an Annual General Meeting in every calendar Year. Section 210 Only audited balance sheet and profit and loss account are to be laid before a company in general meeting. Un audited balance sheet and profit and loss account can not be laid before a company in annual general meeting. Section 210 casts an obligation upon the Board of Directors of a company to lays down balance sheet and profit and loss account before each and every AGM held in pursuance of section 166.
27 October 2010
whether for inter corporate loans u/s 372A BR should be passed or as per clause (e) of sub-section (1) of Sec. 292 of the act, the Director/MD/Officer can make the loan.......
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