This section is from the book "Canadian Banking Practice", by John T. P. Knight.
Question 610. - I have always understood that British Columbia companies cannot borrow from a bank in excess of the paid-up capital. Is this correct? If so, would a special resolution of the shareholders authorizing borrowing in excess of paid-up capital be sufficient authority for a bank to advance money over and above the amount of paid-up capital? I am unable to find any provision in Companies Act restricting borrowings to amount of paid-up capital. Can you inform me on this subject?
Answer. - The restriction referred to is imposed in paragraph 72 of Table A appended to the British Columbia Companies Act, which prescribes that current borrowings made by the directors must not exceed the issued share capital unless sanction has been given by the company at a general meeting of shareholders.