Directors

Save Share

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2014 Hello,
Can a director of a private limited company enter into contract on behalf of the company from third parties or raise money from the public as deposits without any BOD resolution or Power of Attorney? if, so can the other directors of the company be held liable for the misdeeds of such director?
Kindly advise and also quote sections under old companies act.

Thank you.

Ankur Garg

Ankur Garg (Expert)

21 September 2014 No.

Without authority from board through passing board resolution director cannot raise money.

Thanks

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

21 September 2014 Thank you sir,
Hope that applies to the MD also, which means whether it is the MD, ED or NED, no one can enter into any contract or raise money from public without BoD resolution.

Thank you

Ankur Garg

Ankur Garg (Expert)

22 September 2014 Yes it is equally applicable to MD as MD cannot act without the authority of board in certain matters.

Thanks

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now