Page 209 - DCOM106_COMPANY_LAW

Company Law Manpreet Kaur, Lovely Professional University

Notes Unit 13: Borrowing and Debentures

CONTENTS
Objectives
Introduction

13.1 Investments
13.1.1 Meaning of Investment
13.1.2 Investments to be in Company’s Own Name (s.49)

13.1.3 Register of Investments not Held in the Company’s Own Name
13.2 Borrowing
13.2.1 Power of a Company to Borrow
13.2.2 Ultra Vires Borrowing
13.2.3 Borrowing Intra Vires the Company but Ultra Vires the Directors

13.2.4 Other Restrictions on the Borrowing Powers of the Board
13.2.5 Procedure for Delegating Powers to Borrow Money otherwise than on
Debentures

13.3 Prevention of Oppression and Mismanagement
13.3.1 Rule of Majority
13.3.2 Powers of Company Law Board for Prevention of Mismanagement and
Oppression (Ss. 397-399 and 402)
13.4 Summary
13.5 Keywords

13.6 Review Questions
13.7 Further Readings

Objectives

After studying this unit, you will be able to:
Explain investment;
Define borrowing;

Describe ultra vires borrowing;
Elaborate upon provisions for prevention of oppression and mismanagement.

Introduction

A condition requiring or binding an applicant for shares in or debentures of a company to waive
compliance with any of the requirements of this section (S.56), or purporting to affect him with
notice of any contract, document or matter not specifically referred to in the prospectus, shall be
void.

204 LOVELY PROFESSIONAL UNIVERSITY