MCA: Clarification of Sec. 180 of the Companies Act, 2013

Ministry of Corporate Affairs, Government of India has published a circular with clarification with regard to Section 180 of the Companies Act, 2013.

The MCA acknowledged of receiving many representations regarding various difficulties arising out of implementation of Section 180 of the Act with reference to borrowings and/or creation of security, based on the basis of ordinary resolution.

The Ministry clarified that the resolution passed under section 293 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 of the Companies Act, 2013 for a period of one year from the date of notification of Section 180 of the Act.