What action must precede a company's decision to borrow significantly large amounts?

The correct action that must precede a company's decision to borrow significantly large amounts is verifying legal compliance. This step is crucial as it ensures that the company adheres to relevant laws and regulations regarding borrowing, which often include limits on how much a company can borrow, the rights of creditors, and reporting requirements.

Before a company takes on significant debt, it must review the legal framework governing its borrowing activities. This may involve checking provisions under corporate law, any restrictions in its articles of association, and compliance with financial regulations that are relevant to its operations and industry. Ensuring legal compliance minimizes risks associated with potential lawsuits or penalties for overstepping legal boundaries.

Even though other actions, such as obtaining shareholder agreement, directors' consent, and passing a corporate resolution, may be necessary in the broader context of secured and structured borrowing, they typically follow the initial verification of legal compliance. Ensuring that the company is legally allowed to take on the proposed level of debt is a foundational step that all subsequent actions will rely upon.