The Ministry of Corporate Affairs (“MCA”) has issued a clarification last night with regard to section 180 of the Companies Act, 2013.
Circular no 04/2014 (dated 25th March 2014) has clarified that resolutions passed under section 293 dealing with restrictions on powers of Board of Directors of the Companies Act, 1956 prior to 12.09.2013 with reference to borrowings (subject to the limits prescribed) and / or creation of security on assets of the company will be regarded as sufficient compliance of the requirements of section 180 (Restrictions on powers of Board) of the Companies Act, 2013 for a period of one year from the date of notification of section 180 of the Act.
The circular can be found here. The circular was issued in response to industry representations on the difficulty in compliance with Section 180. It is important to note the cut off date of 12th September 2013 which this clarification applies.