Section 179 of the Companies Act, 2013
Section 179 of the Companies Act, 2013 – Powers of Board
📘 Overview:
Section 179 deals with the powers that the Board of Directors can exercise and the manner in which decisions must be taken—either at a Board meeting or through resolutions.
✅ Key Provisions:
1. General Powers of the Board [Section 179(1)]:
The Board of Directors of a company shall have powers to do all acts and take all decisions the company is authorized to do, except those that are required to be done by the company in a general meeting (i.e., by shareholders).
2. Powers to be Exercised by Board Resolutions at Meetings [Section 179(3)]:
The following powers must be exercised by the Board by passing resolutions at a Board meeting (not by circular resolution):
To make calls on shareholders
To authorize buy-back of securities
To issue securities, including debentures (in or outside India)
To borrow money
To invest company’s funds
To grant loans or give guarantees or provide security in respect of loans
To approve financial statements and Board’s Report
To diversify the business
To approve merger/amalgamation
To take over another company or acquire substantial control in another company
Any other matter as may be prescribed
🔹 These powers can be delegated (except for some), via Board resolution, to a committee, MD, manager, or principal officer, subject to conditions.
📜 Rule 8 of Companies (Meetings of Board and its Powers) Rules, 2014:
Certain powers under Section 179(3) must necessarily be exercised at Board meetings, not via circulation.
Some powers (like borrowings or investments) can be delegated, as per Section 179(4).
⚠️ Exclusions:
Shareholder approval is still required for certain actions under other sections (like Section 180 – restrictions on Board powers).
Section 179 does not override the Articles of Association or the Companies Act, wherever specific provisions apply.
🎯 Objective:
To ensure that key strategic decisions of a company are taken with proper board oversight, accountability, and recorded through resolutions.
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