Borrowing limits under company law restrict board borrowings beyond capital and reserves without shareholder sanction. Boards of public companies are restricted from borrowing beyond the aggregate of paid-up share capital and free reserves without prior shareholder sanction; debentures are a common non-voting form of corporate debt issued in multiple forms and may be consolidated as debenture stock. Issuance requires appointment and consent of debenture trustees and a trust deed to secure stock. Companies issuing debentures must create a debenture redemption reserve from profits until redemption and must keep a register of debenture holders; reserve (uncalled) capital cannot be charged except on winding up. Tribunal relief is available for non-redemption.
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.
Borrowing limits under company law restrict board borrowings beyond capital and reserves without shareholder sanction.
Boards of public companies are restricted from borrowing beyond the aggregate of paid-up share capital and free reserves without prior shareholder sanction; debentures are a common non-voting form of corporate debt issued in multiple forms and may be consolidated as debenture stock. Issuance requires appointment and consent of debenture trustees and a trust deed to secure stock. Companies issuing debentures must create a debenture redemption reserve from profits until redemption and must keep a register of debenture holders; reserve (uncalled) capital cannot be charged except on winding up. Tribunal relief is available for non-redemption.
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