Meaning of "UNDERTAKING" as per Section 180(1)(a)

[Jaya Singh]

Dear All,

The company wants to avail loan by creating charge over the assets of the company.  Whether Special Resolution under Section 180 (1)(a) of the companies act, 2013 needs to be passed in such case?

The assets include;

1. Land and Office Building

2. Flats (In the name of the company)

3. Inventories - (more than 20% of Net worth )

4. Trade Receivables  (more than 20% of Net worth )

Thanks & Regards,

Jaya Vinay Singh

Practising Company Secretary

[CS JANAKI]

Section 180 is not applicable to private companies.

In any other case, you require to obtain approval by way of a special resolution if the borrowing money together with money already borrowed exceeds aggregate of its paid up capital, free reserves and securities premium.

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Janaki P 

Company Secretary in Practice

 

Phone No.: +91 94909 55469

http://csjanaki.com/

[Jaya Singh]

Hii Ma'am,

Thanks your mail. Please note that the Company is a Public Limited Company and had passed resolution under section 180(1)(c). My query is whether company has to pass resolution under section 180(1)(a) also?

 

Thanks & Regards,

Jaya Vinay Singh

Practising Company Secretary

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[CS JANAKI]

As you mentioned, the Company is creating only charge, it won't fall under the criteria of "to sell, lease or otherwise dispose of"

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