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Special Resolution for Section 180(1)(c) Borrowing Power Limits

special resolution under section 180(1)(c) of the companies act 2013Section 180(1)(c) of the Companies Act, 2013 requires the Board of Directors of a company to exercise the following power only with the approval from the members of the company by a special resolution— 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, free reserves and securities premium, apart from temporary loans obtained from the company’s bankers in the ordinary course of business:

In the special resolution, the total amount up to which monies may be borrowed by the Board of Directors shall be specified.

Templates of such special resolutions to increase the borrowing limits are as follows—

SAMPLE #1

Increase in the limits for borrowings:

To consider and if thought fit, to pass either with or without modification(s), the following resolution, as a Special Resolution:

“RESOLVED THAT in supersession of all the earlier resolutions passed and pursuant to the provisions of Section 180(1)(c) and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, including any statutory modification(s) thereto or re-enactment(s) thereof, the consent of the members of the company be and is hereby accorded to the Board of Directors of the company to borrow money, as and when required, from bank(s), financial institution(s), foreign lender(s), any body corporate entity(ies), authority(ies), through suppliers credit, through any other instruments either in Indian rupees or in such other foreign currencies as may be permitted under law from time to time, notwithstanding that money so borrowed together with the monies already borrowed by the company, if any, apart from temporary loans obtained from the Company’s bankers in the ordinary course of business, may exceed the aggregate of the paid-up share capital of the company and its free reserves (that is to say reserves not set apart for any specific purpose) provided that the total amount so borrowed by the Board shall not at any time exceed of INR ............... (Rupees ............................... only) or limits so prescribed under Section 180(1)(c), as may be amended from time to time, whichever is higher.

FURTHER RESOLVED THAT the Board of Directors of the company, be and is hereby authorized to delegate all or any of the powers conferred on it by or under the foregoing Special Resolution to any Committee of Directors of the company or to any Director of the company or any other officer(s) or employee(s) of the company as it may consider appropriate in order to give effect to this resolution.

FURTHER RESOLVED THAT the Board of Directors of the company, be and is hereby authorized to do all such acts, deeds and things as may be necessary, proper, expedient or incidental for giving effect to the foregoing resolution.”

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SAMPLE #2
(Fund based limit and Non-fund based limit)

Enhancement of Borrowing Limits:

To consider and, if thought fit, to pass with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED that, pursuant to the provisions of Section 180(1)(c) of the Companies Act, 2013, as amended from time to time, consent of the shareholders be and is hereby accorded for borrowing from time to time any sum or sums of monies which together with the monies already borrowed by the company (apart from temporary loans obtained or to be obtained from the Company’s bankers in the ordinary course of business) may exceed the aggregate of the paid-up capital, free reserves and securities premium of the company, that is to say, reserves not set apart for any specific purpose, provided that the total amount so borrowed shall not at any time exceed INR ................ (Rupees .................................. only) viz., INR ................ (Rupees .................................. only) non-fund based and INR ................ (Rupees .................................. only) fund based limits.

FURTHER RESOLVED that, for the purpose of giving effect to this resolution the Board be and is hereby authorized to do all such acts, deeds, matters and things as it may in its absolute discretion consider necessary, proper or desirable and to settle any question, difficulty or doubt that may arise in this regard.”



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NOTE: The resolution samples here are only for your reference to help you with drafting. Do refer the exact provisions of the Companies Act, relevant rules framed thereunder and any other applicable laws to be able to not to miss out anything important while drafting.

Comments

  1. Soumya Prakash7/22/2019

    Thank you very much! The sample no 2 was useful in my case. I'm learning how to draft by the way.

    ReplyDelete

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