All Courses
Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity Get the App Login Join for Free
Sign in Open App
UGC NET Exam  >  UGC NET Questions  >  Which of the following powers of Directors ca... Start Learning for Free
Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?
  • a)
    Power to make calls on shareholders
  • b)
    Power to make loans
  • c)
    Power to buy back its shares
  • d)
    Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reserves
Correct answer is option 'D'. Can you explain this answer?
Clear all your UGC NET doubts with EduRev
Verified Answer
Which of the following powers of Directors cannot be exercised without...
Section 291 of the Indian Companies Act, 1956 provides that the Board of Directors of a company is entitled to exercise all such powers and to do all such acts and things as the company is authorised to exercise and do. This means that the powers of the Board of Directors are co-extensive with those of the company.
(a) The power to make calls on shareholders in respect of money unpaid on their shares
(b) The power to authorise the buy back of shares
(c) The power to issue debentures
(d) The power to borrow monies otherwise than on debentures
(e) The power to invest the funds of the company
(f) The power to make loans
(g) The power to forfeit shares
Directors don't have powers to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reserves.
View all questions of this test
Most Upvoted Answer
Which of the following powers of Directors cannot be exercised without...
Understanding Directors' Powers in a Company
In corporate governance, the powers of directors are crucial for the smooth functioning of the company. However, certain powers require the consent of shareholders in a General Meeting. Among the options provided, the power to borrow monies exceeding the aggregate of the paid-up capital and free reserves is the correct answer.
Key Reasons for Shareholder Consent
- Protection of Shareholders' Interests:
Borrowing beyond the company's capacity can jeopardize the financial health of the business. Shareholders need assurance that the company is not over-leveraging.
- Limits on Borrowing:
The law often imposes restrictions on how much a company can borrow based on its capital structure. This ensures that the company remains solvent and can meet its obligations.
- Corporate Governance:
Engaging shareholders in significant financial decisions fosters transparency and accountability. It allows shareholders to voice concerns and influence the company's direction.
Comparison with Other Powers
- Power to Make Calls on Shareholders:
Directors can call for unpaid amounts on shares without needing shareholder approval, as this is a routine administrative function.
- Power to Make Loans:
Directors can approve loans within specified limits and do not typically need shareholder consent unless it involves a significant amount or specific conditions.
- Power to Buy Back Shares:
While this requires adherence to legal provisions, it does not necessarily need prior consent from shareholders unless specified by the company’s articles or bylaws.
Conclusion
In summary, among the options provided, the power to borrow more than the paid-up capital and free reserves requires shareholder consent to ensure that the interests of the shareholders are safeguarded and the company remains financially sound.
Free Test
FREE
Start Free Test
Start Free Test
Community Answer
Which of the following powers of Directors cannot be exercised without...
Section 291 of the Indian Companies Act, 1956 provides that the Board of Directors of a company is entitled to exercise all such powers and to do all such acts and things as the company is authorised to exercise and do. This means that the powers of the Board of Directors are co-extensive with those of the company.
(a) The power to make calls on shareholders in respect of money unpaid on their shares
(b) The power to authorise the buy back of shares
(c) The power to issue debentures
(d) The power to borrow monies otherwise than on debentures
(e) The power to invest the funds of the company
(f) The power to make loans
(g) The power to forfeit shares
Directors don't have powers to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reserves.
Explore Courses for UGC NET exam

Similar UGC NET Doubts

Directions: Read the following passage carefully and answer the following question.All historians are interpreters of text if they be private letters, Government records or parish birthlists or whatever. For most kinds of historians, these are only the necessary means to understanding something other than the texts themselves, such as a political action or a historical trend, whereas for the intellectual historian, a full understanding of his chosen texts is itself the aim of his enquiries. Of course, the intellectual history is particularly prone to draw on the focus of other disciplines that are habitually interpreting texts for purposes of their own, probing the reasoning that ostensibly connects premises and conclusions. Furthermore, the boundaries with adjacent subdisciplines are shifting and indistinct, the history of art and science both claim a certain autonomy, partly just because they require specialised technical skills. Both can also be seen as part of a wider intellectual history, as is evident when one considers. For example, the common stock of knowledge about cosmological beliefs or moral ideals of a period.Like all historians, the intellectual historian is a consumer rather than a producer of ‘methods’. His distinctiveness lies in which aspect of the past he is trying to illuminate, not in having exclusive possession of either a corpus of evidence or a body of techniques. That being said, it does seem that the label ‘intellectual history’ attracts a disproportionate share of misunderstanding.It is alleged that intellectual history is the history of something that never really mattered. The long dominance of the historical profession by political historians bred a kind of philistinism, an unspoken belief that power and its exercise was ‘what mattered’. The prejudice was reinforced by the assertion that political action was never really the outcome of principles or ideas that were ‘more flapdoodle’. The legacy of this precept is still discernible in the tendency to require ideas to have ‘licensed’ the political class before they can be deemed worthy of intellectual attention, as if there were some reasons why the history of art or science, of philosophy or literature, were somehow of interest and significance than the history of Parties or Parliaments. Perhaps in recent years, the mirror-image of this philistinism has been more common in the claim that ideas of any one systematic expression or sophistication do not matter, as if they were only held by a minority.Q.What is philistinism?

Top Courses for UGC NETView all

Top Courses for UGC NET

Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer?
Question Description
Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? for UGC NET 2025 is part of UGC NET preparation. The Question and answers have been prepared according to the UGC NET exam syllabus. Information about Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for UGC NET 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for UGC NET. Download more important topics, notes, lectures and mock test series for UGC NET Exam by signing up for free.
Here you can find the meaning of Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Which of the following powers of Directors cannot be exercised without the consent of shareholders in General Meeting?a)Power to make calls on shareholdersb)Power to make loansc)Power to buy back its sharesd)Power to borrow monies exceeding the aggregate of the paid-up capital of the company and its free reservesCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice UGC NET tests.
Explore Courses for UGC NET exam

Top Courses for UGC NET

Explore Courses
SaveJoin the Discussion on the App for FREE
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev
Get App
© EduRev
Education Revolution
Signup to see your scores go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup