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Corporate action – How does a company undertake business activities?
Ordinarily, a company undertakes its activities through its Board of Directors. The Companies Act (both 1956 and the 2013 version) empowers the Board of Directors to exercise all powers, and undertake all actions as the company is authorised to do, with some limitations which may be prescribed under the provisions of the articles of association of the company or the Companies Act.

These limitations may completely prohibit the Board from taking certain actions, or require the powers to be exercised in a particular manner, or they may require the Board to take prior consent (either by way of a general resolution, special resolution or even a higher majority) from the members of the company in a general meeting before taking specific actions.
For instance, the memoranda of articles may specify that certain matters will be dealt with only in the general meeting of shareholders or that a nominee director of a certain shareholder will have veto power over certain issues and that the board will not be able to take certain decisions without consent of such director.

Note that the Board of Directors acting collectively is very different from a director acting individually – in order for an individual director to validly act on the company’s behalf, additional corporate authorisations are required (which are discussed later). 


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