1.According to the Section 292 of the Companies Act, 1956, the Board of Directors of a Company shall exercise the following powers on behalf of the company, and it shall do so only by means of resolutions passed at meetings of the Board:-
* The power to borrow money otherwise than on debentures.
* The power to make loans.
Provided that the Board may, by resolution passed at a meeting “delegate its authority to any committee of directors, the Managing Director, the manager or any other principal officer of the company or in the case of a branch office of the company, a principal officer of the branch office”.
And every resolution delegating the power referred above shall be specific but not implied.
2. According to Section 9 of the Companies Act, 1956 , “Save as otherwise expressly provided in the act, the provisions of this act shall have effect notwithstanding anything to the contrary contained in the memorandum or Articles of a company, or in any agreement executed by it, or in any resolution passed by the company in General Meeting or by its Board of Directors whether the same be registered , executed or passed as the case may be, before or after the commencement of this act; and any provision contained in the Memorandum, Articles, Agreement or Resolution aforesaid shall to the extent to which it is repugnant to the provisions of this act, become or be void, as the case may be.
That means the act overrides the memorandum and articles of association and any internal rules of a company.
Based on the above law , it is clarified that “ no outsider “ of the Company, shall be authorized by the Board of Directors of a Company with regard to the delegation of the powers to execute the deeds, to borrow the advances, to create the mortgage etc., to/ from the a bank.
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- CORPORATE LAWS—MERGER, DE-MERGER,
- REDUCTION OF SHARE CAPITAL