1. COMPANY LAW-2 SYLLABUS&UNIT -1

2. UNIT-1 BORROWING POWERS 3. BORROWING-BUSINESS 4. BORROW OR BURROW 5. WHAT DOES THIS SAY ? 6. MEANING, ULTRA VIRES, MORTGAGE AND CHARGES, FIXED AND FLOATING,REGISTRATIONOF CHARGES, LEGAL PROVISIONS, EFFECTS AND CONSEQUENCES OF NON REGISTRATION OF CHARGES. DEBENTURES, DEFINITION, KINDS, GUIDELINES FOR THE ISSUE OF DEBENTURES, DUTIES OF A SECRETARY,COMPARE SARHOLDER/DEBENTURE HOLDER. 7. BORROWING DO THE COMPANY HAVE THE CAPACITY TO PAY BACK? 8. WHAT IS BORROWING POWER? 9. BORROWING POWERS NEED FOR FUNDS PROTECTS 10. NON TRADING BORROWING POWERS SPECIFIC FOR CERTAIN PURPOSES NO DIVIDENTS TO ITS MEMBERS 11. CONDITIONS TO BORROW FUNDS EXPRESSED OR IMPLIED POWER TO BORROW SHOLD BE IMPLIED POWER TO BORROW TRADING COMPANIES RESTRICTED OR REGULATED SETTING LIMITS UNDER THE MEMORANDUM OR THE ARTICLES OF ASSOCIATION. 12. BOARD OF DIRECTORS POWERS TO BORROW STATUTORY LIMIT ON THE BORROWING POWERS OF THE COMPANY SEC 293 OF COMPANYS ACT PROHIBITS THE COMPANY TO BORROW ANY FUNDS IF THE FUNDS BEING BORROWED ALREADY. 13. MONEY FOR BUSINESS 14. DIRECTOR`S POWER ANY LOAN OBTAINED BY THE COMPANY LENDER IN GOOD FAITH 15. COMPANIES AND ULTR VIRES Unauthorised borrowing Ultra vires the company Beyond the limit of the company`s articles and memorandum Director ultra vires Beyond the authority of directors specified under the articles and memorandum. 16. THE COMPANIES ACT-ULTRA VIRES 17. BORROWING ULTRA VIRES OF THE COMPANY 18. MANAGEMENT THE MANAGERS 19. WHAT IS ULTRA VIRES? An ultra vires act is one beyond the purposes or powers of a corporation. The earliest legal view was that such acts were void. Under this approach a corporation was formed only for limited purposes and could do only what it was authorized to do in its corporate charter. 20. REMEDIES TO THE LENDERInjunction Not spent by the company Lender can obtain the order of injunction Principle of tracingAsset bought by that money could be obtained 21. REMEDIES TO THE LENDERS Subrogation Companypayment for intra viresdebts Rank by applying the doctrine of subrogation Lender get back the loan like any other authorised creditor. 22. REMEDIES-RECOVERY Recovery of damages Company could borrow from the third party Mortgages (immovable properties) Pledge Charged with hypothecation 23. TYPES OF MORTGAGES Simple mortgage (immovable property, money on due date, property sold through court order, judicial saleMortgage by conditional sale (have the property conveyed in his name, pays the entire amount, to the lender, foreclosure, judicial sale.) 24. EQUITABLE MORTGAGE Deposit of title deedsAnomalous mortgage More than one type of above mortgages mentioned. Judicial sale, foreclosure , a suit for obtaining money, due on a mortgage. 25. CHARGES- CREATION Loans are advanced to the creditor to the debtor By the creditor to the debtor on the security of either movable or immovable properties Acharge is nothing but a right created by debtor in favour of the creditor over a movable or immovable property given as a security. 26. MORTGAGE AND CHARGES 27. HOW IS THAT POSSIBLE 28. COMPARISON Fixed chargeFloating charge 29. FIXED CHARGE Con some specific asset of the company Related only to that asset Land or a building Prevents the company to deal with out the consent of the lender 30. FLOATING CHARGE Equitable charge on some asset Charge on stock in trade Book debts Debentures usually create a floating charge on the assets of the company. 31. DISTINGUISH fixedfloating 32. DISTINGUISH Fixed Second charge not possible Fixed asset given as security gets prioritised 33. REGISTRATION OF CHARGES Third party under notice Registration of same property Secured feeling of lenders Charge holders feel that the advance is secured 34. MUST REGISTER Charge holder must register the following Issue of debentures Uncalled capital of the company Immovable property Book debts No pledge on movable property of a company Floating charge including stock in trade Calls made but not paid 35. EFFECTS AND CONSEQUENCES OF NON REGN. Charge becomes void Unsecured debt Immediately payable 5000 rs every day for conscious non registration Registration charges deleted from the memorandum of the company 36. APPLE FOR YOUR BRAIN Debentures 37. WHAT ARE THEY They are debts Stock Bonds Charge on assets of the company or not Fixed rate of interest No voting rights Secured for the floating charge on the assets of the company 38. TYPES Registered Bearer Secured and unsecured Redeemable and non redeemable Convertible and non convertible Preferred and ordinary Equitable Legal 39. PARI PASSU CLAUSE Pari passu clause (the secured debentures discharged though issued at different dates) No preferences 40. BUSINESS What is that mean? 41. GUIDELINES FOR THE ISSUE OF DEBENTURES 42. NO VOTING RIGHTS 43. REDEMPTION RESERVE TO BE CREATED To redeem them 44. NO DISCOUNT ON DEBENTURES Article s does not permit them if permits at a special case then it is not in the capital structure of the company 45. UNSECURED CREDITORS OF THE COMPANY In the Event of winding up 46. SHARE AND DEBENTURE HOLDERS Share holdersdebenture holders creditorsIncome dividendinterestAll the same rate except the preference sharescertainVote, attend meetingsNo voiceRepayment only redeemable preference shares otherwise no payback at the time of liquidationAt the time of redemptionDividend after payment of income and taxesBefore arriving at the profits int charged on the profitsAfter debenture holdersPriority 47. WIMBLEDON DEBENTURE SEATING 48. SECRETARY`S DUTIES IN THE ISSUE OF DEBENTURES 49. CONVENE A MEETING OF THE BOARD OF MEETING 50. PASS A RESOLUTION Issue of debentures Terms of issue Rate of interest 51. PERMISSION OF RESERVE BANK Bearer of the debentures issued Approval of board of directors Resolution appointment of underwriters Approval of the board drafting of propectus Debentures bond Trust deed approved by the board Printing of Prospectus Debenture bonds and trust deed.