Companies act

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Rakhi (Querist)
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12 December 2012 can a Public Limited Company invest in shares of outside india Company and in this case Indian co. want to represent one of its director for investment on behalf of company? is there any comliance under Companies act and also provide a Board resolution for representing director on behalf of company.

GJCo

GJCo (Expert)
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14 December 2012 Inter corporate loans and investments are governed u/s 372A.
The company (in your case, the Indian Company),can invest in the foreign company to the extent of 60% of paid up capital and free reserves or 100% of free reserves, whichever is higher. If your company has already made such investments or granted loans to other companies or is acting as a guarantor for some other company, then the limit arrived at by applying 60% or 100% as the case may be, will be deducted by such sum as mentioned above. Further, approval of all the Directors is required for make such investment.
If the amount of investment exceeds the limits of 60% or 100%,then approval of the shareholders is required either at AGM or EOGM.

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