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    Section 180(1)(c) Companies Act 2013

    Posted By : SHALU / Published on : 12-Sep-2022 09:10 AM / View : 845 / Comment : 1

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    Formed a management committee and delegated the power to borrow money (within the statutory limit of Section 180(1)(c)) alongwith its related documentations and filings.

    Generally, we file MGT 14 every time we avail loans from banks.

    My question is if the power is delegated to the Management Committee to borrow money on behalf of the Board, we do not have to file MGT 14 everytime , being a Public listed company?
    Read more on : companies 1801c section

    • s per the exemption notification dated 5th June 2015, the provisions of Section 180 of the Companies Act, 2013 do not apply to private companies.

      Section 180 of the Companies Act, 2013 deals with restrictions on the powers of the board of directors with respect to borrowing, and requires that any borrowing by a company that exceeds its paid-up share capital and free reserves must be approved by a special resolution of the shareholders.

      However, in the case of a private company, the requirement for obtaining approval by way of a special resolution for borrowing under Section 180 has been exempted through the aforementioned notification. This means that the board of directors of a private company can borrow without obtaining the approval of the shareholders through a special resolution, subject to the provisions of the Articles of Association of the company.

      However, it is important to note that the board of directors of a private company must still ensure that any borrowing undertaken is in the best interest of the company and its stakeholders. The board must also ensure that any borrowing undertaken is within the limits set out in the Articles of Association and does not result in the company being unable to meet its financial obligations. Additionally, the board must also comply with all other applicable laws and regulations related to borrowing and financing activities.

      03-04-2023 / 11:33:18 AM
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