Disposal of company property: conveyancing or usufructuary mortgages can trigger restriction on board powers. The Department clarifies that not all mortgages constitute a disposal of property triggering the statutory restriction: property not integral to the company's undertaking and not affecting business will not be treated as the undertaking. Mortgages that convey the charged property to the mortgagee (subject to equity of redemption) or usufructuary mortgages transferring effective control or possession should be deemed disposals and may attract the restriction, whereas assignable mortgages of the whole or substantially the whole undertaking do not necessarily engage it.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Disposal of company property: conveyancing or usufructuary mortgages can trigger restriction on board powers.
The Department clarifies that not all mortgages constitute a disposal of property triggering the statutory restriction: property not integral to the company's undertaking and not affecting business will not be treated as the undertaking. Mortgages that convey the charged property to the mortgagee (subject to equity of redemption) or usufructuary mortgages transferring effective control or possession should be deemed disposals and may attract the restriction, whereas assignable mortgages of the whole or substantially the whole undertaking do not necessarily engage it.
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