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    Question

    The directors of a company can borrow money exceeding

    paid up share capital and free reserves by ____________
    A Board resolution Correct Answer Incorrect Answer
    B Passing a special resolution Correct Answer Incorrect Answer
    C Passing an ordinary resolution Correct Answer Incorrect Answer
    D Informing the other directors Correct Answer Incorrect Answer
    E Both a & d Correct Answer Incorrect Answer

    Solution

    Section 180. Restrictions on powers of Board: (1) The Board of Directors  of a company  shall exercise the following powers only with the consent of the company by a special resolution, namely:— (c) to borrow money, where the money to be borrowed, together with the money already borrowed by the company will exceed aggregate of its paid-up share capital, free reserves and securities premium , apart from temporary loans obtained from the company’s bankers in the ordinary course of business

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