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Section 179(3)

Co Act 2013 7504 views 10 replies

if a company borrow money 50 times in a year ,then 50 boad resoution required or one Board resolution enough. under section 179(3)

Replies (10)
I think instead you could rather delegate the power to one person.

If you delegate the power to some committee, MD or other (as specified in the section), then just pass one resolution  and file with ROC....however, take care to mention the borrowing limit in the resolution....

if delegate to MD,then one BR TO BE FILED

Section 117(3) requires that resolutions passed u/s 179(3) also need to be filed with ROC.  Section 179(3)(d) requires resolution to be passed only at a meeting of the Board "to borrow monies".  The power to borrow money can also be delegated by the Board.

 

The question  here is whether delegation of power to borrow money can be equated with "to borrow monies" actually?  Probably not.  Even if authority is delegated to a Committee, the lending institution willl ask for resolution of the Committee for actual borrowing.  It may happen that the Committee might decide subsequently not to borrow.  In some cases even Board might not have the power to borrow.  In such cases, special resolution is required u/s 180 to delegate authority to borrow to the Board.  This again is not a resolution for actual borrowing.  Hence intention of the law seems to be that even in case of delegation, what is required to be filed with ROC is resolution for actual borrowing and not for delegation of authority to borrow.

 

Hence it appears that resolution for actual borrowing needs to be filed each time a resolution is passed.  Contrary views are welcome.

 

 

Yes Mr. Agrawal each time when there is borrowing we need to file the resoluotion with ROC whether it is passed by the board or by any delegated committee/person.

 

Regards

Jyotika

if loan taken from xyz company not from lending institution ,then situation is different or not.

We can pass a resolution for  taking loan from XYZ upto specified limits from  time to time and then file with ROC.  Money cannot be borrowed without Board resolution in a meeting.

but how the company know from whom loan is taken.it may be different peaple or diffrent amount  .you are saying about estimated amount of borrowing .

P C Sir, What will happen if the authority is delegated to a single person, say MD? What is the actual intent of the Section is not clear!

so what is the conclusion? is filing of a single resolution of delegating the powers to the committee or md sufficient compliance of the act or each resolution passed by the committee or md required.


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