Ceiling of loans by corporates

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 October 2011 Dear Friends,

Could you, Please provide the informations related to ceiling of Loan acceptances by the Corporates from issued of Debentures.

Will the overall ceiling cover u/s 372A of Companies act?

Hoping a prompt response in this favor.

Please help as it is most urgent....

Thanks,
Amit

CA Pabbaraju Laxmi Narasimha

CA Pabbaraju Laxmi Narasimha (Expert)
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25 October 2011 According to sec 372A of the companies act 1956
The company can make an Intercorporate loans and investment without the approval of the shareholders upto a maximum of

60% of the Paidup Capital And Free Reserves (Or)
100% of the Free Reserves
Which ever is higher.

The amount should be deducted with already made investments and loans.
Here the free reserves means the amount that can be free distributable which has specifically includes the Security premium.

This provision does not apply if the Inv (or) loan made
-Non Body corporate
-100% Subsidiary Company

This section does not apply to a Private company

At the final level.. the practical question will be asked.

keep track of this in the munish bandari Law Hand book

Querist : Anonymous

Querist : Anonymous (Querist)

27 October 2011 MR Rao,

Thank so much for the valuable information.

Pl clarify wether Debentures are also covered in the overall ceiling.

Thanks!