Secretarial practice

Bibliographic data

Monograph

Identifikator:: 1828236004

URN:: urn:nbn:de:zbw-retromon-249926

Document type:: Monograph

Title:: Secretarial practice

Edition:: fourth edition

Place of publication:: Cambridge

Publisher:: W. Heffer & Sons Ltd

Year of publication:: 1930

Scope:: viii, 987 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter XVIII. Mortgages, debentures and receivers

Collection:: Economics Books

LATTED CRT ~ AGes, DEBENTURES AND RECEIVERS PRACTICALLY all companies have an express power to borrow, which is conferred by the memorandum of association, and in almost all cases this express power to borrow is coupled with a power to give security for the loan upon the company’s property. A trading company, however, has in general an implied power to borrow [General Auction Co. v. Smith (1891), 3 Ch. 432]. And where a company has power to borrow, it can, unless forbidden by its articles, give security, e.g. by mort- gaging its property [Patent File Co. (1870), 6 Ch. App. 83]. The express power to borrow, which most companies possess, generally includes the power to ‘raise’ money. The use of the word ‘raise’ is not meaningless, since a power to borrow money merely, without power also to raise money, does not enable a company to issue irredeemable debentures, which are really a perpetual annuity [Southern Brazilian Railway Co. (1905), 2 Ch. 78]. The power to borrow may be exercised by the directors, if the articles expressly or impliedly authorise them to exercise it. Sometimes the exercise of the power is placed in the hands of the company in general meeting, but this is fre- quently inconvenient. It may be, for example, that a temporary overdraft is required, and it would, if the power to borrow were exerciseable only by the company, be neces- sary to convene a general meeting before the transaction could be carried out. The usual plan, however, is for the directors to be authorised to exercise the borrowing powers of the company up to a certain limit which must not be exceeded without the sanction of the company in general meeting. If permission to deal is to be obtained from the Stock Exchange, the articles must limit the borrowing powers of the Board. The limit may be the amount of the nominal capital of the company, or the amount of the issued capital of the company for the tiine being, or any other reasonable sum. Where by the ar- ticles the amount borrowed may not exceed the preference Borrowing Powers.

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