| Commentary

6 Directors’ borrowing powers

| Commentary

6 Directors’ borrowing powers

A company’s articles of association will often contain a provision defining the amount or the conditions under which directors may borrow. In the absence of a limit in the articles, directors probably have unlimited power to borrow, because the general powers of management usually given to them confer the power of doing whatever the company itself might do1, except for those things which are required by the articles of association or by statute to be done by the company in general meeting2.

It is often sensible, except in the case of private companies owned by close associates,

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