borrowing Powers of the compnay.pptx

This ppt is related to the borrowing powers of the company

1. Borrowing Powers of the company

2. Borrowing powers of the company Subject to the restrictions imposed by MOA and AOA, the power to borrow money is exercised by the directors. However, Directors cannot borrow money Without the consent of the company by passing special resolution That exceeds the aggregate of the paid up capital of the company.

3. Ultra Vires Company may resort to unauthorized borrowings Beyond the power of the company given by MOA and AOA Beyond the power of the directors

4. Effect of Ultra Vires Borrowings by company VOID Injunction order (if money has not been applied) If the money is applied in paying off lawful debts, lender becomes the creditor Claim the damages from directors and sue them personally

5. Borrowings which are ultra vires the directors The company may rectify Or lender may sue the directors ( Indoor Management)