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Sec 179(3) of CA 2013 states that the board shall excersice borrowing powers only through board meetings. The resolution passed by the Board has to be filed in MGT 14 within 30 days. Sec 180 states that company cannot borrow other than temporary loans exceeding total of pd up capital and free reserves except with the shareholders approval by way of spl resolution. Should the existing companies having borrowings and the borrowings exceeding total of pd up capital and free reserves as at 31st March 2014 pass the Board resolution and shareholders resolution even if they have not borrowed additionally in the FY 1415 ie after the commencement of provisions of CA 2013?.

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Posted By: Latha 10 year(s) ago

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    SUSHIL KUMAR ANTAL

Please note that w.e.f. 12.09.2013, a new provision under Section 180(1)(c) of the Companies Act, 2013 became effective. Whereas Section 179(3) became effective w.e.f 01.04.2014 under which the company has to file Form MGT-14 at ROC for passing a resolution to borrow monies. Further, as per General Circular No. 32/2014 dated 23rd July 2014, any resolution approved or passed by companies under relevant applicable provisions of the Old Act during the period from 1st September 2013 to 31st March 2014, can be implemented, in accordance with provisions of the Old Act, notwithstanding the repeal of relevant provision subject to the conditions - that the implementation of the resolution actually commenced before 1st April 2014 and -that this transitional arrangement will be available upto expiry of one year from the passing of the resolution or 6 months from the commencement of the corresponding provision in New Act whichever is later. Further, any amendment of the resolution must be in accordance with the relevant provision of the New Act. Please read the situation according the said situation.

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Expert    Ankit Singhi

As per General circular No. 4/2014, any resolution passed before September 12, 2013 is valid for one year from the date of notification (i.e September 12, 2014). After that such resolution will become null and void. Further company is required to pass special resolution if it wants to exercise any powers given in section 180 of companies Act in future (i,e after September 12, 2014)

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