Books > Old Books > Poetry Northwest (1959)


Page 185

CHAPTER 17
DEBENTURES

EVERY trading company, unless prohibited by its memorandum or articles, has power to borrow. (1) This power includes, as incidental to it, the power to give security for the loan.
What security a company can give for a loan depends on its memorandum and articles. A power to charge the uncalled capital of the company may be expressly given by the memorandum and articles.(2) On the other hand, if power be given to create specific charges, there will be an implied prohibition against charging uncalled capital. (3) Capital which can only be called up in the event of winding up cannot be charged as security for a loan.(4)
Sometimes the borrowing powers of the company are restricted in the memorandum and articles to, e.g., two-thirds of the paid up capital ,of the company. In such a case, as the lender takes with notice of these documents he is bound to see that the limit is not exceeded. If the limit is exceeded, the borrowing will be ultra vires and void.
Effect of Unauthorised Borrowing.-Borrowing powers are usually exercised by the directors, as they are under Art. 79 of Table A. Sometimes a limit is placed upon the power of the directors to borrow on behalf of the company. For example, Table A, Art. 79 provides:
" The amount for the time being remaining undischarged of moneys borrowed or secured by the directors . . . (apart from temporary loans obtained fromthe company's bankers in the ordinary course of business) shall not at any time, without the previous
sanction of the company in general meeting, exceed the nominal amount of the share capital of the company for the time being issued."
Obtaining an overdraft from the bank is borrowing.(5)
If the directors exceed the borrowing powers conferred on them, the lender, if the excess consists of non-compliance with some internal regulation of the company, can rely on the rule in Royal British Bank

1 General Auction Estate Co. v. Smith, [1891] 3 Ch. 432.
2 Re Pyle Works (1890), 44 Ch. D. 534.
3 Newton v. Anglo-Australian Investment Co., [1895] A. C. 244. 4 Re Irish Club Co., [1906] W. N. 127.
5 Brooks & Co. v. Blackburn Benefit Soey. (1885), 9 App. Cas. 857.

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where is HTML where is HEAD where is TITLE EVERY trading company, unless prohibited by its memorandum or articles, has power to borrow. (1) This power includes, as incidental to it, what is power to give security for what is loan. What security a company can give for a loan depends on its memorandum and articles. A power to charge what is uncalled capital of what is company may be expressly given by what is memorandum and articles.(2) On what is other hand, if power be given to create specific charges, there will be an implied prohibition against charging uncalled capital. (3) Capital which can only be called up in what is event of winding up cannot be charged as security for a loan.(4) Sometimes what is borrowing powers of what is company are restricted in what is memorandum and articles to, e.g., two-thirds of what is paid up capital ,of what is company. In such a case, as what is lender takes with notice of these documents he is bound to see that what is limit is not exceeded. If what is limit is exceeded, what is borrowing will be ultra vires and void. Effect of Unauthorised Borrowing.-Borrowing powers are usually exercised by what is directors, as they are under Art. 79 of Table A. Sometimes a limit is placed upon what is power of what is directors to borrow on behalf of what is company. For example, Table A, Art. 79 provides: " what is amount for what is time being remaining undischarged of moneys borrowed or secured by what is directors . . . (apart from temporary loans obtained fromthe company's bankers in what is ordinary course of business) shall not at any time, without what is previous sanction of what is company in general meeting, exceed what is nominal amount of what is share capital of what is company for what is time being issued." Obtaining an overdraft from what is bank is borrowing.(5) If what is directors exceed what is borrowing powers conferred on them, what is lender, if what is excess consists of non-compliance with some internal regulation of what is company, can rely on what is rule in Royal British Bank 1 General Auction Estate Co. v. Smith, [1891] 3 Ch. 432. 2 Re Pyle Works (1890), 44 Ch. D. 534. 3 Newton v. Anglo-Australian Investment Co., [1895] A. C. 244. 4 Re Irish Club Co., [1906] W. N. 127. 5 Brooks & Co. v. Blackburn Benefit Soey. (1885), 9 App. Cas. 857. where is meta name="keywords" content="old books, Free book , free book offer , free audio books , free coloring book pages , free book reports , free audio book , audio books free download , book free , free guest book , books free , free book summaries , download free audio books , free childrens books." where is where are they now rel="stylesheet" type="text/css" href="../../style.css" where is meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1" where is BODY bgColor=#ffffff text="#000000" where are they now ="#000000" v where are they now ="#FF0000" where is div align="center" where is strong where is strong where is a href="http://www.aaoldbooks.com" Books > where is a href="../default.asp" title="Book" Old Books > where is strong where is a href="default.asp" Poetry Northwest (1959) where is table width="700" border="1" align="center" cellpadding="15" cellspacing="0" where is center where is tr where is td width="160" align="center" valign="top" where is div align="center" where is td align="center" valign="top" where is div align="left" where is div align="center" where is p align="left" Page 185 where is strong CHAPTER 17 DEBENTURES where is p align="justify" EVERY trading company, unless prohibited by its memorandum or articles, has power to borrow. (1) This power includes, as incidental to it, what is power to give security for what is loan. What security a company can give for a loan depends on its memorandum and articles. A power to charge what is uncalled capital of what is company may be expressly given by what is memorandum and articles.(2) On the other hand, if power be given to create specific charges, there will be an implied prohibition against charging uncalled capital. (3) Capital which can only be called up in what is event of winding up cannot be charged as security for a loan.(4) Sometimes what is borrowing powers of what is company are restricted in what is memorandum and articles to, e.g., two-thirds of what is paid up capital ,of what is company. In such a case, as what is lender takes with notice of these documents he is bound to see that what is limit is not exceeded. If what is limit is exceeded, what is borrowing will be ultra vires and void. Effect of Unauthorised Borrowing.-Borrowing powers are usually exercised by what is directors, as they are under Art. 79 of Table A. Sometimes a limit is placed upon what is power of what is directors to borrow on behalf of what is company. For example, Table A, Art. 79 provides: " what is amount for what is time being remaining undischarged of moneys borrowed or secured by what is directors . . . (apart from temporary loans obtained fromthe company's bankers in what is ordinary course of business) shall not at any time, without what is previous sanction of what is company in general meeting, exceed what is nominal amount of what is share capital of what is company for what is time being issued." Obtaining an overdraft from what is bank is borrowing.(5) If what is directors exceed what is borrowing powers conferred on them, what is lender, if what is excess consists of non-compliance with some internal regulation of what is company, can rely on what is rule in Royal British Bank 1 General Auction Estate Co. v. Smith, [1891] 3 Ch. 432. 2 Re Pyle Works (1890), 44 Ch. D. 534. 3 Newton v. Anglo-Australian Investment Co., [1895] A. C. 244. 4 Re Irish Club Co., [1906] W. N. 127. 5 Brooks & Co. v. Blackburn Benefit Soey. (1885), 9 App. Cas. 857. where is Server.Execute("_SiteMap.asp") %

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