State the legal provisions regarding the right to take life of the company.
Every company has the implied right to borrow money for its business and to keep its assets as security. The company can exercise its right to borrow money only subject to the rules mentioned in its memorandum or articles of association. The directors of the company can take loans only within the limits prescribed by the memorandum and the Articles of Association, that is, the company’s councilors memorandum and the councilor memorandum give the right to the operators to take loans up to a limit and in the general assembly of the company to take loans beyond that. Consent is required.
Methods/Modes of Borrowing
Companies have the right to take loans within the limits specified in their memorandum and articles. Companies clearly describe in these documents the assets that can be taken loans and collateral. Companies can generally get loans through the following methods
(1) By bank overdraft.
(ii) On the basis of exchangeable instruments like bills of exchange, promissory notes etc.
(iii) By mortgage or mortgage of properties
(iv) By issuing commercial paper.
(v) By generating a charge on the uncalled capital.
(vi) By generating charges on book loans.
(vii) Patent Rights, Trademark, Copyright
(viii) by issue of debentures.
(ix) By inviting public deposits.
(x) By getting cash credit from banks