Company law: please reply at the earliest
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
19 August 2013
ABC Ltd. is a listed company having a paid-up share capital of Rs. 36 crore and general reserves of Rs. 24 crore. It desires to make a loan of Rs. 10 crore to XYZ Ltd. ABC Ltd. holds 60% of the equity shares in XYZ Ltd. ABC Ltd. has already made investment in and given loans to other companies aggregating to Rs. 30 crore. ABC Ltd. has not committed any default in respect of institutional loans or in repayment of fixed deposits. State whether the company is eligible to give loan of Rs. 10 crore to XYZ Ltd. Would your answer be different if XYZ Ltd. is ABC Ltd.'s wholly-owned subsidiary?
19 August 2013
Hi
The provision of section 372 give powers to the Board of ABC Limited or XYX limited to give loan up to 60& of its paid up capital or free reserve.
As per this you have already cross the 60% of paid up capital or free reserve for giving loans.
So for any fresh loan if you want to give pass a resolution through postal ballot under section 192A of the Companies Act, 1956.
The provision of section 372 give powers to the Board of ABC Limited or XYX limited to give loan up to 60& of its paid up capital or free reserve.
As per this you have already cross the 60% of paid up capital or free reserve for giving loans.
So for any fresh loan if you want to give pass a resolution through postal ballot under section 192A of the Companies Act, 1956.
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