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Company law

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k.c. palai

M.Com

29 Points Posted on 07 February 2014

Dear Sir/ Madam,

Would request you to solve the following query:

XYZ Pvt Ltd is a company incorporated on Aug, 2014. Its present paid up capital is Rs. 1 Lac and there are no Reserves & Surplus.

Now it wants to take a Inter-Corporate Deposits of Rs. 10 Lacs from another Company for a period of 1 month (which is not a Banking company).

Now as per the section 180 of the Companies Act, 2013 does this Private Limited Company has to pass special Resolution in General Meeting for the limit enhancement in the above purpose.

Thanks in Advance

K. C. Palai

Replies (1)

CS Arjun Rajagopal

B.com ACS

738 Points Posted on 08 February 2014

Dear Palai,

As per Sec. 180(1)(c) of the Companies Act, 2013:-

The Board of Directors of a company shall excercise the following powers only with the consent of the company by a special resolution, namely:-

"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"

Therefore in your case, convene an EGM and pass special resolution and file 23 with ROC within 3o days of passing of SR.

Regards,

ARJUN RAJAGOPAL