The Board of friends & Company Ltd. proposes to borrow money exceeding the company's paid-up share capital and free reserves without authorization in the articles. Under Section 180 of the Companies Act, 2013, such borrowing:

Explanation: Section 180(1)(c) of the Companies Act, 2013 provides that the Board of Directors of a company can exercise the power to borrow money (where the sum exceeds the aggregate of its paid-up share capital and free reserves) only with the prior consent of the company by a SPECIAL RESOLUTION, unless the articles authorise it and the loans are those excepted. This safeguards shareholders against excessive or unauthorised borrowing. An ordinary resolution does not suffice, and a mere board decision without the special-resolution consent exceeds the Board's powers.