The company passes an SR U/S 180(1)(c) of the Companies Act, 2013 and fixes the max borrowing limit to Rs 200 Crores. The same SR gets registered as required under the Act. Now, the company proceeds to borrow Rs 50 lakhs. Is it required to pass further a BR? If so, is it required to register the same BR with the ROC ? And whether the same registration process will go on again and again whenever the company borrows money within the limit of Rs 200 crores?
09 April 2014
The opening words of Section 180 itself provide the answer "The Board of Directors of a company shall exercise the following powers only with the consent of the company by a special resolution..." While general approval of borrowing upto Rs. 200 crore is obtained from the shareholders is obtained u/s 180, for specific contracts like cc, term loans and/or other mode of borrowings, approval of the Board of Directors is required u/s 179(3)(d), which can of course be delegated as given in the section. Further this resolution will have details of all terms and conditions of the borrowings. Yes, the registration process under Section 117 will have to be complied every time a Board Resolution is passed under Section 179(3).
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