23 May 2014
sir /madam, One of our client is Private limited company is taking loan from a banking company against mortgaging assets. Now according to companies act 2013 section 180 applies on public as well as private companies. should we pass special resolution according to section 180 (1)(c)as well according 180 (1) (a)..?
Section 293 of the Companies Act, 1956 was applicable only to public companies i.e. private limited companies were exempted from this requirement and therefore they could borrow any sums of money upto any limit without the need of seeking any approval from the members of the company. Now Section 180 is applicable to all companies i.e. public as well as private. So now onwards even private companies have to seek the approval of their members if they are intending to borrow monies in excess of their paid up share capital and free reserves.
The relevant section 180(1)(c) states as follows:
180. (1) The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution, namely:—
(c) to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital and free reserves, apart from temporary loans obtained from the company’s bankers in the ordinary course of business
23 May 2014
Sorry sir, i wanted to ask in previous comment that should i pass special resolution according to section 180 (1) (a) for mortgaging asset of the company??
CAclubindia
