BOARDS AND ITS POWER UNDER COMPANIES ACT 2013

BY SUSHMA GOWDA

INTRODUCTION

Director can participate in the board meeting through video conferencing or other audio visual mode as may be prescribed.

NOTICE OF BOARD MEETING

Notice Of not Less than Seven days in writing is required to call a board meeting and notice meeting to all directors shall be given, whether he is India or outside India by hand delivery or by post or by Electronic means.

PARTICIPATION OF DIRECTORS

The participation of director at board can be done through Video Conferencing or by electronic means will be considered in quorum.

POWER OF BOARD OF DIRECTORS SECTION 179 OF COMPANIES ACT 2013

This section empowers the board of Directors to exercise its power in all areas, Except where it is specifically mentioned in the companies act or in the MOA or AOA that the powers shall be exercise at a general meeting by the shareholders.

As per sub section (3)(d), the power of board includes power to borrow money.

RESTRICTION ON POWERS OF BOARD OF DIRECTORS

In case the company wants to borrow money, where the money to be borrowed, together with already borrowed by the company, will exceed aggregate of its paid up share capital and free reserves, a apart from the temporary loans obtained from the company’s banks in the ordinary course of business, consent of members by passing special resolution in general meeting will be required.

DIRECTOR DOES POWER TO BORROW INCLUDE POWER TO GIVE SECURITY

The power to borrow whether express or implied includes the power to charge the assets of the company by way of security to the lender.

Hence, the given statement is correct that the ‘power to borrow includes the power to give security’.

DELEGATIONS OF POWERS TO DIRECTORS, MD, MANAGER ETC.

Board may, by a resolution passed at a meeting, delegate

To any committee of Directors, the managing Directors, The manager or any other principal officer of the company or
In the case of a branch office of the company, the Principal Officer of the branch office,

The power specified in clause (d) to (f) on such condition as it may specify.

SECTION 173 OF THE COMPANIES ACT 2013 DEALS WITH MEETING OF BOARDS AND SECTION 174 DEALS WITH QUORUM

First board meeting should be held within 30 days of the date of incorporation. And there shall be minimum 4 board meeting every year and not more then 120 days shall be intervene between 2 consecutive Board meeting.

In case of one person company, small company and dormant company, at least one board meeting shall be conducted in each half of the calendar year and the gap between 2 meeting should not be less than 90 days.

SEPARATE POWER OF MEMBER AND DIRECTORS

The company is an entity distinct from its shareholders and its directors. Some of its powers may, according to its articles, be exercised by directors, certain other powers may be reserved for the shareholders in general meeting. The power of management are vested in the directors. They and they alone can exercise these power.