TOPIC 19: QUICK REFERENCE TO “Section 180 (1) (c) of Companies Act, 2013. w.r.t. Borrowing Powers”

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Quick Reference to Important Query in relation with "Section 180 (1) (c) of Companies Act, 2013. w.r.t. Borrowing Powers " :-.
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Query:-.
ABC ltd is a unlisted Public Company. The company wants to borrow ₹ 500 crore from the Financial Institution.
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The Financial Position of the Company is as follows;-
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Paid up share capital:- ₹ 100 Cr.
Profit & loss credit balance (Profit) :- ₹ 80 Cr.
General Reserve :- ₹ 100 Cr.
Asset revaluation reserve:- ₹ 40 Cr.
Debenture Redemption reserve:- ₹ 30 Cr.
Long Term Borrowing (Loan):- ₹ 50 Cr.
Short term Borrowing :- ₹ 15 Cr.
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Then, whether Company is required to pass Special resolution in general meeting???
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Answer:-.
1. As per section 180 (1) (c) of Companies Act, 2013, The Special resolution is required if the amount of Borrowing is more than Total paid up share capital + Free Reserve + Surplus (Profit) apart from Temporary & Short term loan in ordinary Course of business.
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2. In this Case/ Question The Company is required to pass Special resolution in general meeting.
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3. How/ Calculation :-
Paid up share capital:- ₹ 100 Cr
+ Surplus (Profit) :- ₹ 80 Cr.
+ Free Reserve :- ₹ 100 Cr.
Total= ₹ 280 Cr.
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( - ) Long term loan ₹ 50 Cr.
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Final Total / Amount upto which Company can borrow without passing Special resolution ( ₹ 280 Cr - ₹ 50 Cr ) = ₹ 230 Cr.
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4. Hence, It is conclude that Special resolution in general meeting is required because Company wants borrow ₹ 500 Cr ( Which is more than ₹ 230 Cr ).
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5. Debenture Redemption reserve, Asset revaluation reserve, Short term loan Should not be considered in our Caluation. It should be Excluded.
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Regards
ACA SOURAV BAGARIA